It's one thing for a game company to say they'd like to see movies based on their hit franchises.

It's another thing altogether when Valve boss Gabe Newell and sci-fi producer and director du jour J.J. Abrams publicly start hashing out a plan for movies based on the Valve hits "Half-Life" and "Portal."

After speaking together on a panel, Abrams told Newell that he'd like to work with Bellevue-based Valve on a game, according to the report. Then Newell replied that "We're going to find out of there's a way we can work with you on a 'Portal' and 'Half-Life' movie."

Abrams later provided more details to game site Polygon, saying movies based on the games are in the "early stages" but are "things I want to see."

After a month on the wagon, I slipped off and used an assault rifle last week. It didn't feel the same.

The rifle was in a new episode of "Halo 4" that Microsoft was previewing for reporters at its Kirkland game studio. I blasted away at aliens on the screen, then swapped the rifle for more powerful weapons hidden in the game.

"Halo 4" is a fun game with a rich sci-fi story that blurs the line between game, movies and episodic TV shows like "Star Trek."

But action shooting games have lost some of their appeal since the Newtown shooting in December.

Meanwhile, I'm not sure I want to play the military shooter "Call of Duty" again, even though it used to be a favorite and remains the best-selling game and a cornerstone of the industry.

Like the mass killer in Norway in 2011, the Newtown shooter was a fan of "Call of Duty." Adam Lanza was a deranged loner who reportedly played the game in a basement room decorated with military posters.

That provided an opening to the gun lobby, which tried to deflect the call for more gun restrictions by blaming video games as well. Then it proposed bundling new gun restrictions with limits on games.

The bundling may sound logical, but it's really political flimflam. Every politician and lobbyist knows that repeated attempts to crack down on violent games have gone nowhere and that the Supreme Court last year settled the issue, ruling that games are protected speech under the First Amendment.

So bundling game and gun restrictions would pretty much guarantee nothing will happen. It also shows that the gun lobby is concerned about protecting just one passage in the Constitution (but not the "well regulated" part of that passage).

Obama sidestepped this roadblock. He punted on games, without ignoring the concerns.

The study he proposed would follow on the heels of a new generation of game hardware promising even more realistic, immersive games. With luck, the heightened attention will push game publishers to be more creative and perhaps develop new franchises that are less centered on combat.

Some games are already evolving into more sophisticated entertainment, even if many still "cater to that innate male desire to have a shoot-em-up," said Richard Rouse III, a Seattle game developer and author of a book on game design.

This is happening in part because players are getting older and have higher expectations. Half of American homes now have a game console, the average player is 30 and two-thirds are over 18, according to the Entertainment Software Association.

"In time, as the audience realizes some experiences are richer and fuller and more grounded in real life and struggles we all face, they'll stop wanting ones that are so abstracted and removed from reality," Rouse said.

Rouse drew a parallel to food, saying that people can only go so far with junk food before they crave something more nourishing.

"Eventually people figure out that empty calories aren't such a good idea," he said.

Rouse, who was hired by Microsoft in June, speaks at industry events on ways to incorporate moral choices into games.

An example he gives is "Far Cry 2," a 2008 game by Ubisoft that puts players between warring factions in Africa. Players have choices about how to approach challenges. They can avoid combat by sneaking around things, and there are different tools to use besides guns.

Combat is still the heart of the game and what draws players in, but there's more depth.

"Just as we can have serious movies about combat situations that deal with it seriously, games can do that as well," he said.

For now, the most successful model is "Call of Duty."

The latest version, subtitled "Black Ops II," made more money after its November launch than any other entertainment product - more than the launch of any movie, book or album. It generated more than $1 billion in its first 15 days on the market, remained the best-seller through December and continues to be the most popular of the multiplayer games hosted on Microsoft's Xbox Live service.

It's a brutal game where you earn respect by quickly killing as many people as possible, preferably with an efficient shot to the head. But maybe it's really an extension of the soldier games that boys have always played.

I'm embarrassed to say that I've been pretending to shoot people for as long as I can remember, from the mean streets of Spokane's South Hill to the jungles of Magnolia and the galactic battlefields of "Halo."

In elementary school, my parents took a stand and decided they wouldn't buy toy guns for me and my brother.

So we played combat with sticks instead. Realizing this put our eyeballs at risk, my parents decided it was safer to provide an armory of toy guns instead.

Now we'd probably simply blast each other on the TV screen.

I'm just glad my kids are girls.

P.S. Here are a few thoughts on things parents can do to help ensure their kids don't become too immersed in ultra-violent games:

1. Add a few of the more humane games to their diet. You can't stop them from eating chips and fries, but maybe you can work in some fruit now and then.

2. Observe and play the games they play the most. It may not be your bag, but try to understand why it's fun for them and what makes the games appealing.

3. Encourage cooperative play with friends -- real ones, who are known offline -- so the games complement rather than substitute for companionship.

4. Maintain access to the hardware and software you provide, and know how to access user accounts. Create your own account on the game service and become their friend, similar to the way you would on Facebook.

5. Play a match online with kids, or recruit a friend or family member to play online with them periodically. It adds real-world perspective to hunt for someone you really know, and not just blast away at strangers.

With all the hoopla at last week's Consumer Electronics Show, you'd never guess it was missing a few hugely important products that are about to be released by two of the industry's biggest players.

I'm talking about new versions of Microsoft's Xbox and Sony's PlayStation that are expected to debut later this year. They're potentially the hottest consumer-electronics products of 2013, but there wasn't a peep about them at the annual gadget mecca.

Sony had its usual huge presence at CES, but said nothing about its new PlayStation, showing only the PS3 that first appeared in 2006.

This cone of silence -- and the variety of other new products on display that bring digital entertainment to TV sets -- raises questions about how much demand there is for expensive new game hardware.

Will people pay $300 to $400 to upgrade their consoles, or put that money toward a higher-definition TV with a quad-core processor that streams online movies and connects directly to cloud gaming services?

People are still buying lots of consoles, and Nintendo's Wii U is off to a pretty good start. But overall game-hardware sales in the U.S. declined 27 percent last year, to $4 billion, down from $5.6 billion in 2011, according to NPD research.

We're either at the low point of a hardware cycle, or interest is waning because there are other ways to expand the capability your TV.

I'm betting that it's mostly just a low tide. Especially after seeing clues at CES about the direction console-makers, particularly Sony, are taking. They made me think that the new consoles could be exciting and useful enough to extend their run for another five years or more.

Sony employees went silent whenever I asked about the PlayStation 4, but they showed a lot of technology that seems likely to be in the console, or at least complement the new hardware.

One of them accidentally mentioned to me a 4K video player that will be revealed later this year. My guess is that the PS4 will have this capability, similar to the way the PS3 arrived at the dawn of the Blu-ray era with a Blu-ray drive inside.

Sony lucked out in the naming department, with the PS4 arriving with a wave of 4K TVs coming out this year. The number refers to the roughly 4,000 lines of resolution the new displays have, nearly four times higher than 1080p high-definition sets. These TVs are called "ultra high definition" but Sony emphasizes the numeral 4.

Getting the most out of a 4K set today is tricky. There aren't 4K videodiscs or other media yet.

Online video services such as Netflix are gearing up to stream 4K content, which will be compressed to minimize the burden on your broadband service. The new 4K TVs can also digitally upscale 1080p content coming out of Blu-ray players.

But for uncompressed, unscaled 4K video, you stream the content from a hard drive containing the big video files. Sony began selling 4K sets last fall and loans buyers a server -- basically a PC -- that comes loaded with movies. (It's the least they can do when you pay $25,000 for an 84-inch set.)

Sony showed a prototype of a new version of this server last week. It was a round, metal box similar to the hat-box-shaped Sony Vaio Media Center PCs that Sony discontinued a few years ago. (It's pictured above and below, in a side view).

A representative wouldn't tell me anything about the capacity of this device, but I overheard a Sony executive showing it off to a group of VIPs. I'm pretty sure he said it will ship with 50 terabytes of storage capacity, preloaded with 90 movies to start, and can store up to 400 movies.

Sony can do this in part because it owns a major movie studio. It has been distributing 4K films for a while, delivering them on hard drives that are plugged in to digital projectors at the theater.

My guess is that Sony is working on some sort of memory device for storing and distributing 4K movies -- perhaps a solid-state memory cartridge? -- and the PS4 will be one of the first players. Either that, or Sony will to extend the technology developed for its 4K media server to the console.

Sony spokesman Philip Jones wouldn't talk about this with me when he showed me around the booth.

But Jones did point out some interesting things that you can do with a 4K TV and the current PlayStation. For instance, you can display photos on the screen with 8.3 megapixels of resolution, compared with about 2 megapixels of resolution you'll see on a current high-def TV.

That may not sound like much, but it tracks with the trend that Apple, Samsung and others are driving toward higher-resolution displays on phones and tablets. It all coincides with the broad enthusiasm for digital photography.

You don't need a PlayStation to display photos on a TV, but the console does have pretty nice photo-handling software.

Sony also has been dabbling in ways to let PlayStation owners play games side-by-side and see different action on the same set, when wearing 3-D glasses. Last year, it introduced this capability on a PlayStation-branded TV. At CES last week it was showing this feature on a wall-sized display.

Also highlighted in Sony's booth this year were various ways to use tablets and laptops to navigate and control a TV. The company also showed the Web tablets that it bundles with its 84-inch 4K sets, to browse and control the TV and server.

Combine some of these capabilities with even more vivid games enabled by the next generation of game consoles, and there may be hope yet for the traditional video game business.

I wasn't the only one snooping around Sony's booth and the rest of CES for clues about this technology, by the way.

On the plane ride home, I sat near a Microsoft employee who works on planning new Xbox products. When I floated my idea about the PS4 piggybacking on the move toward 4K TVs, he said he wasn't that enthused about 4K TVs.

The Xbox guy was more excited about video-streaming hardware components shown by Broadcom and others. Using the new 802.11ac flavor of Wi-Fi, Broadcom's new chips can stream content at up to 867 megabits per second. Broadcom refers to this fast wireless as "5G" technology.

I didn't make it to Broadcom's booth, but the company was showing how this hardware can connect four tablets to a TV set.

All four could simultaneously stream content, enabling them to be used for multiplayer gaming.

I'll let you do your own speculation about what that means for the next Xbox.

Nintendo finally finished one of the key features of its new Wii U console, just in time for Christmas.

The company today said that it will release the TVii feature of the Wii U on Dec. 20, a month after the system's U.S. launch on Nov. 18.

More than 400,000 Wii U consoles were sold in its first week on the market in the U.S. Each required a lengthy system update and additional updates to add services that have trickled out since the launch.

Adding TV features was key for Nintendo as it competes with other game consoles that have evolved into entertainment hubs, connecting TV sets to a variety of online video services.

The Wii U's advantage over Microsoft's Xbox 360 and Sony's PlayStation 3 is the Wii U's GamePad controller, which has a 6-inch touchscreen display that can be used for video playback or as an advanced remote control for cable and video services. (An early version of TVii is shown above in a picture by Mark Harrison, Times staff photographer)

Shortly after the Wii U's launch, Netflix, Hulu Plus and Amazon.com's streaming video services became available on the console. The GamePad could be used to change channels and volume on TVs right out of the box.

TVii adds a program guide so the GamePad can be used to peruse and select content from cable and satellite providers. It also includes social features that let users chat about shows with friends connected via Nintendo's network. Users can also post comments about shows to Facebook and Twitter while watching via the Wii U.

"After Dec. 20, you'll never look at your TV the same way again," Nintendo of America President Reggie Fils-Aime said in the release. "Wii U owners have already experienced the transformative effect that the GamePad has on game play and social interaction. Nintendo TVii shows how the integrated second screen of the GamePad can also transform and enhance the TV viewing experience. Welcome to the new world of TVii."

Still delayed is the ability to sync TVii with a TiVo and further integration with Netflix. Those capabilities are now expected in early 2013 in the U.S. Later, Nintendo may add the ability to control other DVRs using the GamePad and TVii program guide.

UPDATE: The TVii update wasn't ready this morning but a Nintendo spokeswoman told me it should go live around noon.

Activision today said "Call of Duty: Black Ops II" grossed a mind-boggling $1 billion in its first 15 days on the market last month.

That was more than the box office record set by "Avatar" in 2009, when it took $1 billion in over 17 days, Activision noted.

Activision noted multiple ways that its "Call of Duty" franchise - a series of military-themed action games - has become more lucrative than the biggest movies.

The franchise has exceeded box office receipts for the "Harry Potter" and "Star Wars franchises and global box office receipts for the top 10 grossing films of 2012 combined, the company said.

So yes, there will be a "Black Ops III" and maybe IV, V and VI for the Wii U2, Xbox 1080 and PlayStation 5.

"In order for Call of Duty to remain the entertainment juggernaut that it is, and keep our fans coming back for more, we need to continue to bring fresh ideas and new innovations to the table every time, while always staying true to what people fell in love with in the first place," Eric Hirshberg, chief executive of Activision Publishing, said in the release."That's what we did with Call of Duty: Black Ops II, and that's what we intend to keep on doing."

Here's a screenshot of "Black Ops II" (which also suggests the direction the Seattle police may head with their new drones):

The cool kids in Silicon Valley usually get all the attention. But the tables are turning, now that it's getting harder to make a killing with a clever app or website.

Lately, the Valley's been fretting about a slowdown in venture funding for consumer Web companies.

Venture capitalist Fred Wilson opined last week that the consumer Web has finally matured and the big players like Google, Facebook, Amazon.com, Microsoft and others are "starting to suck up a lot of the oxygen.'

In a blog post, Wilson wrote that "consumer behaviors are starting to ossify on the Web, and it is harder than ever to build a large audience from a standing start."

Meanwhile, Seattle has been steadily growing a promising crop of business-oriented startups with half the glamour and perhaps twice the promise.

These companies don't get the buzz of the Valley's groovy consumer startups. But those that survived the recession and steadily built strong businesses are moving into position for big breakouts over the next year or two.

The backdrop for this is the emergence of Seattle as the world leader in cloud computing. Tech ventures small and large are building the infrastructure, tools and services that are modernizing the business world and managing the massive amounts of data that's being generated.

That environment is drawing talent and investors now that enterprise software is back in favor. Evidence of this came in a surge of financing deals over the past month as a handful of tech startups in the area raised collectively more than $100 million.

"We're going to look back 10 years from now, and we're not going to believe how successful the Pacific Northwest has been in terms of growing great businesses," Matt McIlwain, managing director at Madrona Venture Partners in Seattle, told me last week.

Here's a look at some of the area companies moving into pole positions:

Big Fish Games: The steady Seattle casual-games giant is hunkering down and investing heavily in new businesses, which could position the company to go public or be acquired within two years.

Big Fish just named Dave Stephenson (below right, in a photo by Times photographer Ken Lambert) its president, freeing up founder and Chief Executive Paul Thelen (left) to focus on its new initiatives.

Stephenson formerly led finance operations for the biggest group at Amazon.com, its North American retail business. He joined Big Fish as chief financial officer last year.

Big Fish produces and publishes hundreds of games a year and distributes them on multiple platforms. Its games may not be household names, but they're good enough to draw a huge, paying audience. That provides more consistent growth than chasing big hits.

Sales grew 30 percent last year and this year will exceed $200 million. Its global head count is about 700, including 550 in Seattle, where it added nearly 100 employees over the past year.

Big Fish considered going public last year but held off because it was planning big investments in its new cloud gaming platform. Thelen said the investments will lead to "hypergrowth" but wouldn't have gone over well on Wall Street.

"We saw a lot of opportunity to emerge as a much bigger company through this forward investing in these new businesses we're pursuing now," he said.

Big Fish plans to spend perhaps 18 to 24 months getting the new ventures up to speed. They include the expansion of its cloud gaming platform, new "free to play" games supported by microtransactions and expansion in Asia.

"When we emerge is the time we'd consider an acquisition or an IPO, but right now we're in a build phase," Thelen said.

Smartsheet: Bellevue-based Smartsheet is announcing Monday that it has raised $26 million to accelerate its business providing online spreadsheets. The funding came from Madrona and Insight Venture Partners.

More than 20,000 organizations are now using Smartsheet's online service to collaborate and share information.

Chief Executive Mark Mader expects his team will grow from 40 to 140 over the next 18 months. Smartsheet is cash-flow positive and saw triple-digit sales growth over the last three years.

"The opportunity we see here, it's substantial," he said.

Mader wouldn't say much about plans to go public or be sold. But he acknowledged that large software vendors are interested in adding new products that are used by workers at every level of a company.

Those companies have to innovate "or find technologies that have huge reach and touch users within business."

The amount of data that companies need to store will grow 50 times by 2020, yet corporate IT budgets and staffing are expected to grow only about 50 percent over that period, Qumulo Chief Executive Peter Godman said.

"That situation -- this massive increase in data and a fairly modest increase in resources -- requires fundamentally better and more efficient technologies," he said.

Qumulo is a fourth-generation Seattle tech company. Godman came from Isilon, a data-storage company started by veterans of RealNetworks, which was started by a Microsoft alum.

Isilon was sold to EMC for $2.25 billion in 2010.

At last week's state Innovation Summit, the president of EMC's Isilon group said the business has expanded from 500 to 1,300, and sales have more than tripled since the acquisition.

Qumulo is keeping its product plans under wraps until next year, but in the meantime it's using its newfound capital to hire like mad. Godman expects head count to grow from 18 to 68 over the next 18 months.

Unable to wait for the Thanksgiving sales, the Mariners went ahead and bought a huge new TV for Safeco Field.

Huge is actually an understatement.

Last week the team began work on what will be the biggest video display in Major
League Baseball and one of the largest in professional sports. It's the centerpiece of the biggest upgrade to the ballpark since it opened in 1999 and a technical marvel that could become a tourist attraction on its own.

At 201.5 feet by 56.7 feet, the display is nearly a block long and wider than the record-holding jumbo display at Dallas Cowboys Stadium. It's ten times the size of the ballpark's current video screen and has a viewing area of roughly 2,182 42-inch TVs.

And yes, it will still display hydro races - but the boats will now be rendered in full 1080p high-resolution.

Here's a simulated image provided by the Mariners:

Work has already begun to dismantle the ballpark's original scoreboard. The new display should be operational in March, in time for the April 8 home opener versus the Houston Astros.

It's replacing a cluster of displays and signs, including a 26 by 46 foot standard-definition video display, billboards and a matrix board displaying stats.

Instead of simply upgrading the old panels, the Mariners opted to install a single large display. The Panasonic HD LED system can be reconfigured digitally to have the look of a traditional scoreboard, with riveted panels that reflect the ballpark's architectural style (shown in another rendering, below).

Or it can switch in a blink to a vivid, fullscreen display for replays.

Kevin Martinez, vice president of marketing, provided an example of how the display may be used.

"So Felix Hernandez just strikes out a batter in the top of the eighth inning," he said. "We're going to go live to Felix, who tends to be an animated, excited guy. We'll cut to shots of the crowd and then a replay of that moment."

The display is the biggest portion of $15 million that the team is spending on maintenance and improvements to the field for the 2013 season. That includes the relocation of the outfield fence and other amenities that will be announced later, but it's mostly the big display.

Under the team's agreement with taxpayers who funded the ballpark, the Mariners are responsible for keeping Safeco Field a "first class facility" and the old displays weren't up to snuff. The matrix board was on its last legs and failed during a few games in the 2011 season.

Like any sports fan remodeling their home, the Mariners saw that they had a huge expanse of space and opted to install the biggest possible TV.

"We have this big structure that has a smaller video screen, a scoreboard and signage," explained Dave Curry, the team's vice president of technology. "The idea first was to go all LED so we had a flexible palate, if you will, to be able to change and move things around and just be much more dynamic."

Then they decided to really go for it.

"As we were looking at the size of the structure we started thinking, 'if we could get this thing to be native 1080p that would be the ultimate resolution,'" Curry said.

The display will have 1080p by 3840p resolution and 4,147,200 pixels. It's actually made up of mutiple panels, about nine inches square, that are assembled like tiles. It will have a total viewing area of 11,425 square feet. The Cowboys' 160 by 72 foot display covers 11,520 square feet.

Plastic panels will protect the display from impact, though hittters have yet to reach the scoreboard at Safeco Field.

Dropping perhaps $10 million on a TV isn't an attempt to one-up the neighbors, Martinez insisted, although the Seahawks and Sounders did upgrade the displays at CenturyLink Field in March. The football stadium received Mitsubishi LED displays - a 44 by 50 footer in the north end, and an 84 by 24 footer in the south end.

Mariners spokeswoman Rebecca Hale noted that the upgrades are covered by a different budget than team operations, so they won't affect plans to boost the team payroll and make it more competive.

The challenge will be keeping players' eyes on the field.

Here's a picture from the Mariners, of the old scoreboard being dismantled:

Here are more technical details of the display, provided by the Mariners:

Operating system: Vendor ANC Sports' VisionSoft. The 64-bit OS also powers Safeco Field's out-of-town scoreboard and LED fascia displays. The system allows for 32 gigabytes of memory per thread per video board, enabling 100 percent real-time speed through all of the venue's displays.

The previous scoreboard included a 26 by 46 foot ProStar video display and 34 by 76 foot incandescent matrix board, plus fixed billboards. It had total dimensions of 56 by 200 feet.

Microsoft today announced that "Halo 4" had sales of $220 million in its first 24 hours of its release last Tuesday.

That was higher than previous "Halo" games, which set entertainment launch records. It was also a bigger haul than the biggest movie opening in the U.S., "Harry Potter and the Deathly Hallows: Part 2."

Sales are "on track" to reach $300 million in global sales the first week, according to the release.

"We're thrilled that 'Halo 4' has emerged as the biggest U.S. entertainment launch of the year," Microsoft Studios boss Phil Spencer said in the release.

The last big "Halo" game, "Halo: Reach," grossed $200 million in its first day in 2010. The launch of "Halo 3" generated $170 million on its first day in 2007.

Microsoft noted that the live-action video series accompanying last week's launch, "Halo 4: Forward Unto Dawn," has generated more than 46 million views online.

But "Halo 4" may not hold the crown for biggest game launch of 2012 for long.

First it legalizes marijuana. Next it's likely to become the hub for online gambling.

The city's already on the forefront of online casinos, with Seattle companies building some of the leading virtual-gambling operations on Facebook and mobile devices such as Apple's iPad and iPhones.

For now they're using virtual chips -- not real money. But the federal government may legalize online gambling within the next year or two as a way to boost tax revenue.

An early sign of this gold rush came in January, when Las Vegas gambling giant International Game Technology (IGT) bought Seattle video-game company DoubleDown Interactive in a deal worth up to $500 million.

IGT paid $250 million in cash and promised another $250 million if revenue and retention goals were met.

IGT's primary business is making actual slot machines and other gaming systems used in casinos. Last week IGT finally revealed in its quarterly earnings report what a good bet it placed.

DoubleDown helped IGT grow its revenue from interactive games by 302 percent in the quarter and 293 percent in its fiscal year that ended Sept. 30, to $144 million.

DoubleDown operates one of the largest digital casinos. It had 5 million players per month on average during the quarter. On a daily basis, about 1.4 million played.

"They were leading when we got them and together we're moving even faster," IGT's chief financial officer, John Vandemore, said last week.

DoubleDown's growth suggests there's still good money to be made in the social-gaming business. It helped IGT blow past analyst expectations and its stock rose 5 percent the day after its earnings report. That's in contrast to social bellwethers Zynga and Facebook, which are struggling to gain investors' favor.

IGT's giving DoubleDown everything it needs to keep growing the operation in Seattle, according to DoubleDown Chief Executive Greg Enell, a veteran of Microsoft, Wild Tangent and Big Fish Games.

When I interviewed Enell last month in his office a few floors below Paul Allen's penthouse near CenturyLink Field, Enell employed 128 people. Now it's up to 147 and the company's moving this week into adjacent offices that will double its space.

"There really are no restrictions, any kind of hiring cap for us," he said. "We're building out as fast as we reasonably can, without sacrificing the quality of the people we hire."

DoubleDown started in 2010 with a handful of people in a little office on North Lake Union. Back then it was just another one of the dozens of small startups in Seattle trying to make a go building games.

The venture was more deliberate than a roll of the dice. Enell had previously sold another game company to Big Fish, then started a profitable online trivia-game company that provided funds to start DoubleDown.

"The idea was let's go build the biggest gambling-oriented audience online in the world. If we do that and online gambling legalizes, we're going to be really valuable," he recalled. "We saw a clear exit, and our exit happened a little sooner than I thought it would, but it did happen."

The team had expected legalization of online gambling to come between 2013 and 2015. Enell still thinks it could happen in the next year or two. But he's leaving that issue to the experts at IGT and staying focused on building virtual gambling games for Facebook and mobile devices.

IGT has a big library of slot-machine games that DoubleDown draws from to expand its online lineup. It adds about two games a month.

DoubleDown's also working to extend its global presence by localizing its games in different markets. It's also been building its own suite of tools to build browser-based games using HTML5 technology.

Meanwhile Enell's former employer, Big Fish, in August launched an online casino that's now making more money on Apple devices than DoubleDown.

But DoubleDown still has the lead on Facebook, where it's the fifth-highest grossing app, behind Zynga's Texas HoldEm Poker, FarmVille, ChefVille and FarmVille2.

Since this is all virtual currency, I'll make a bet of my own: The success that IGT's having with DoubleDown is going to draw other big gambling companies to Seattle, looking for expertise building online audiences and virtual games. Maybe a gambling company will finally put enough money on the table to buy Big Fish.

It's hard to predict the future, though. Just ask Enell's parents, who weren't enthused about his love of video games when he was growing up in Bellingham.

Microsoft's epic year of product launches continues next week with the Tuesday debut of "Halo 4," a new version of the sci-fi action franchise on the Xbox console.

It's a big test for Microsoft's Kirkland-based game studio, 343 Industries. The 350-person team was formed to continue developing "Halo."

The studio that originally created the game, Bungie, spun out of Microsoft in 2007 and went on to build different games. Microsoft kept Bungie's space, a former hardware store in Kirkland that's now home to 343.

There's a big incentive to keep "Halo" going. Since it debuted with the first Xbox in 2001, the franchise has had sales of more than $3 billion. More than 43 million games have been sold and 3.3 billion hours have been spent playing it online on the Xbox Live service.

"Halo 4" begins with the return of the original Halo hero, the armored Master Chief. He's back to defend mankind against hordes of aliens and help unravel the mysterious events that put the universe in such a predicament.

This time the game provides more human drama -- including the chief's personal story-- told with hyper realistic, cinematic episodes. It will retail for $60, or $100 for a special "limited edition."

Also new is a series of new missions called "Spartan Ops," which can be played solo or with other players online. Microsoft will release new missions, with video episodes telling more of the Halo story, every week to keep players engaged.

It's a massive undertaking that's also facing lots of competition this holiday season, including new versions of action blockbusters "Assassin's Creed" and "Call of Duty: Black Ops," plus the debut of Nintendo's new Wii U console and growing competition from games played on tablets, phones and social networks.

To find out more I spoke to Bonnie Ross, head of 343 Industries, and Frank O'Connor, franchise development director. Here's an edited transcript of our chat:

Q: Did you set up 343 to be more autonomous than other Microsoft studios?

Ross: When I started the studio I felt it was incredibly important to think about the franchise for the next 10 to 20 years and as such the universe is our strongest character.

So being able to have all those components in one studio was really important, so that we could actually think about what the foundation of the universe is going forward, what stories we want to tell and that we have and own all the fiction, all the toys, everything, so the teams can have a lot of synergy.

Q: Do you think the franchise has 10 or 20 years of legs left?

O'Connor: In some ways there's no doubt whatsoever. Obviously, technology and the landscape will change, but the need for those stories and those characters and that universe and those discrete game play experiences, I don't see it going away anytime soon.

Ross: I'm being a bit presumptuous here but when you think about sci-fi universes or fantasy universes I think that -- I hope and I believe -- we have some of the same DNA you do with "Star Wars," with "Lord of the Rings," with "Harry Potter," and that we have a universe in which you could tell hundreds of stories. It's our job to make sure that each story is deliberate and good but I feel like there's room - it's a large universe; there are lots of stories to be told.

Q: How do you avoid overplaying it?

O'Connor: Bonnie just compared it to things like "Star Wars" and "Lord of the Rings." The mainline activity for those things is the movies, right, and I think that the connected tissue - things like the books and comic books and spinout franchise elements of those universes don't actually harm the core pillars as long as you keep making good movies and an appropriate number of those movies with a correct cadence. I think that franchise is then supporting that franchise as those things, even as those things support that franchise.

If we think about games as our mainline activity, we wouldn't even have the capacity to overdo the number of games it would take to swamp our faithful users and players.

But you also have to make sure - just like those other franchises - you have to make sure that each of your big beats is successively better or more meaningful than the last. And if you can control that quality and if you can control that arc then I don't think there's much danger of saturation, especially when you have two or three years between big beats.

Q: How much of your audience now are "original" Halo players vs. new players? How much churn do you have?

Ross: I think the nice thing about "Halo" is we actually have a very large age range where due to the nature of our universe and the morals around the story we have a bunch of young kids. Then we have a bunch of older guys who started in their 20s or 30s and they're now. ...

O'Connor: Older than that.

Ross: I think what we're seeing is sort of an intergenerational -- where you've got fathers who grew up on "Halo" and they're bringing their kids in who are in a much younger demographic.

O'Connor: With sequels it's super important that you don't assume that people are experiencing this in some sort of contiguous spectrum of experiences. There are some simple things we've done in the game in terms of how we tell the story, for example - it's a completely self-explanatory, standalone story if you're new to it. If you have followed the series for the entirety of the games it will feel really meaningfully connected but it's also a great entry point.

Ross: It's been five years since "Halo 3." So when you look at that in game years that's a whole generation of gamers that maybe haven't experienced master chief before.

Q: What about Bungie's more recent games, "Halo: ODST" and "Halo: Reach"?

Ross: They're there, just not Master Chief, right? So if you look at coming in the Halo door the first time with "ODST" or "Reach," both good games, but I think very different. With Halo 4 we're starting a new saga, and it is the Master Chief saga and he is our hero, and he's been absent for five years.

O'Connor: "ODST" and "Reach" are both very successful products but they're both very deliberately isolated from the larger story arc of the universe.

Q: Reach brought in new vehicles, things like flyable spacecraft. Will you continue that in "Halo 4"?

O'Connor: We did do some careful editing and we have removed a lot of things as well as retained a lot of things. But generally if you've learned a bunch of skills from playing ODST and Reach, those skills and some of those elements - things like the jetpack for example - are going to be present in Halo 4 so your investment in building your skills is still playing off.

Q: Did you feel extra pressure, releasing a game at the tail end of the console cycle -- pressure to move the last consoles off the shelves?

O'Connor: One of the really exciting things for me, being in this business for 20 years, is seeing what they can get out of that hardware. Every single year you think we've tapped out and there's always more you can get out of it.

Ross: We do look at this tail very differently than we looked at Xbox tail, largely because of what the box has evolved into. Also, with 343, we're establishing a brand new team. We're a startup team ... with an established franchise. We need the two to come together.

It was my decision to make sure that we had something and something strong in 2012. Hopefully you can see it in what we have with this game - it's leaps ahead of what we've done before. I think this box has more to offer, and I also needed this team to ship Halo- we need to put our stake in and move forward so we can continue to evolve and grow deeper as a team.

Q: You're presumably working on the next version -- "Halo 5" or whatever it's going to be called will be the anchor tenant on the next version of the Xbox, right?

O'Connor: We've done as much prototyping and storytelling and the future arc of the universe as we have on technology. So we're definitely working on the future but in some ways it's technologically agnostic at this point.

Q: You're building the muscles of the studio to continue, and the next version is probably going to be really critical for the next generation of the Xbox platform. They need a franchise like that.

O'Connor: We definitely have a lot of smart people inside the studio and outside the studio thinking about future technology and future development., for sure.

Q: Are there plans to ever release a PC version of "Halo 4"?

Ross: Not at this point, no.

Q: How will "Halo 4" fare against other big games coming out this holiday season?

O'Connor: The reality is that everyone on our team is a gamer so there's this weird tension of like, oh no, these other big games are coming out the same time as ours. You've got "Assassin's Creed" and "Call of Duty," but those guys are gamers, too, and so they're looking forward to these games.

It's going to be a very good holiday for gamers in general. Everything is timed and appropriately thought out and measured and managed so we won't have any real surprises out of that competition, but I think 2012 is turning out to be a big, banner year for triple A games, even as people worry about people moving off to mobile experiences and stuff. There's no shortage of demand for those big-ticket experiences.

Q: One of the trademarks of the franchise was bits of irreverent, snarky humor that Bungie slipped in. Will that continue in the larger organization?

O'Connor: There's plenty of snark in the game and some of it's right in your face. There's definitely some interesting dynamics in the Spartan Ops universe.

Ross: Spartan Ops ... is going to be a pretty unique experience. To Frank's point, the story doesn't end with campaign, it continues on. It gives you something each week to think about for both game play and where the story is going.

Ross: I think we hope that it drives different engagement and gives more options for different types of players to continue on after they're done with campaign.

O'Connor: In some ways it's an experiment. There isn't anything exactly like it on the console right now. Airing it like a TV show and pairing that with good characters and fun and drama and excitement will hopefully keep bringing people in.

But instead of cuing up a dirge, the company is marking the occasion by throwing a music party.

Starting Tuesday, the company is dropping the Zune brand from its digital music store and streaming service, which now will be referred to as Xbox Music.

Xbox Music also will be the default music player on Windows 8 PCs and tablets when they go on sale Oct. 26, taking the place of Microsoft's trusty Windows Media Player.

To sweeten the deal, Microsoft is providing free access to stream its entire music catalog on Windows 8 tablets and PCs.

"It will be the only tablet operating system that has free streaming of music," said Yusuf Mehdi, head of strategy and marketing in Microsoft's Interactive Entertainment business.

Free access to the catalog, which has about 18 million songs in the U.S. and 30 million globally, will be unlimited for six months, after which Microsoft will taper down access and encourage people to start paying $10 per month for an ad-free version of the service.

To support the free service, brief ads will be played about every 15 minutes.

The ad-free version of the service is comparable to streaming services offered by companies such as Spotify and Rhapsody.

The audio quality of the paid service will be slightly higher -- 256 kilobytes per second vs. 192 Kbps for the free version.

Xbox Music also includes a digital store, for downloading and buying music.

Like the Zune service, the Xbox Music service includes "smart playlists" that can automatically generate playlists around artists or genre.

Windows 8 users with Xbox Live premium subscriptions will be able to use "Smartglass" to play music selected on a tablet through a TV connected to an Xbox.

Microsoft launched Zune in 2006 -- with Bill Gates appearing at a launch concert in Seattle's Westlake Park -- as a belated challenge to Apple's iPod.

Last year, Microsoft discontinued Zune hardware but the brand continued on the Xbox and Windows Phone devices, where the company's music and video store are called the Zune Marketplace.

The Xbox Music brand will begin rolling out with an upgrade to the Xbox console that begins Tuesday.

It will come to Windows 8 when it launches Oct. 26 and to Windows Phone devices with the new version of the platform that arrives Oct. 29.

Zune lives on in spirit, though. The bold interface design of the player and service were a major influence on the design of Windows Phone and Windows 8.

Here's Gates at the Zune launch, in a 2006 photo by Ken Lambert, Times staff photographer:

Here's Microsoft's comparison of Xbox music with other streaming music services:

Among the topics we covered was competition with Apple, Google, Microsoft and others developing new entertainment hubs.

Q: Could Nintendo TV be the killer app in the Wii U -- even more than its gaming capabilities?

A: The way that I would say it is Nintendo TV is certainly going to be something that every member of the family picks up and engages in at least once a day. If that helps them get more comfortable with the GamePad and in the end adds to more games being played, then that's great. But fundamentally it's part of the overall proposition of games, TV plus social.

Q: Do you think you've designed a superior TV interface for a family?

A: We think we have. In terms of a way to find what you want, to actually watch it on the big screen or on the small screen and then to be socially engaged on it, yeah, we do think we've created a better mousetrap.

Q: Will that broaden the appeal of the Wii U beyond gamers?

A: We believe so.

Q: Will people buy the system just for home entertainment, similar to the way many early buyers of Sony's PlayStation 3 were looking mostly for a great Blu-ray player?

A: You know it could be, but I do think in the end the consumers we're talking to are those consumers who want a game console in their home. So they want the best Nintendo entertainment, they want the best of the third-party entertainment.

So I think it's going to be that larger community of gamers which now is like two-thirds of all households today. But once they get it in the house we think that Nintendo TV is certainly going to be a great value add.

Q: Lots of people are looking to "digify" their TVs with devices that connect them to the Web. Are you looking to fill that niche with a device that makes it easy to get Hulu and Netflix on their TVs?

A: Certainly. But I think more than that. If the consumer just wants to add VOD [video on demand] to their TV, there are a lot of different ways to do that. I think the value we bring is by providing the consumer a better way to find all of that content.

And here's the example: if you have Amazon video services ... for you to find what's on there, what's hot, what's trending, is pretty tough. Now say you've got Amazon plus Netflix plus Hulu Plus and you're trying to figure out what it is you're trying to watch -- that's what Nintendo TV really solves.

Based on the way you watch TV -- which is based on shows, based on the actors, based on the genres, based on what your friends are watching -- we solve that equation by letting you search that way across all of your entertainment. For us, we think that's the big idea.

Q: Google's also trying to build a new TV interface with search and social capabilities ...

A: There are a lot of people who've been trying to do this and I think the challenge has been how do you build the economics, how do you drive the installed base, and how do you drive the relationships.

Our approach was, because it's on the back of the gaming platform, that's what's going to drive the installed base. Because we're clearly a games and entertainment company, Netflix and us have a fantastic relationship. We've got a fantastic relationship with the Amazon video people, a fantastic relationship with Hulu Plus, a growing relationship with the cable companies and dish companies.

Essentially we were the perfect vehicle to drive this type of innovation into the home. Whereas all of the other competitors have maybe an issue from a partnership standpoint that is tough to solve.

Q: But are you still getting commissions on the video rentals through the Wii U?

A: We're not going to talk about the business relationships that we have, but suffice it to say we've got very mutually beneficial relationships with all of the entities that participate in Nintendo TV.

Q: Will you make as much money on the platform from services such as video as you will from video?

A: As a first-party publisher, there's a large part of the value chain that we make on the game side ... so I doubt we will make the same profitability on the services side as what we do on the games. But it's still going to be a very healthy business for us.

Q: I talked to companies a few years ago that were working on ways to identify who was using the TV at a particular time so they could target ads to, say, mom, dad or the kids. How are you going to take advantage of that information, which you'll see through your system?

A: Certainly the way the system works, it gives us access to a lot of information, as long as the consumer agrees to share it with us. How we utilize that, we'll find out as we go.

Again, we're not in the ad-serving business. We're not in the micro-targeting business. But certainly I can imagine as we build out the service that's something that Comcast or AT&T or any of the cable companies are really going to be interested in, potentially.

Q: So it could give you leverage, negotiating to work with them?

A: Sure.

Q: Apple TV is also a rival of yours, including the current adapter and the rumored actual TV set. If it comes to pass I'll bet that it's something comparable to the interface you've developed (blending services, adding search, social and messaging, plus a simple and elegant remote).

A: We're all working off of the same public statements but it seems like they, too, want to be your cable box and they want to own that direct relationship with the consumer based on the content.

Again I think that's the sticking point for how they're going to bring their vision to life. Because I don't think any of the established players are willing to give that up.

Q: Over the life of this console the landscape's going to change, more video is going to move to on-demand, cloud services instead of cable.

A: Potentially. One of the beauties of what it is that we're doing is that essentially Nintendo TV is a cloud service, right? It's delivered over the Web. It's interactive. It can change on the fly.

Q: If this really grows, will it change the character of Nintendo? Will it become more of a consumer electronics company vs. a game company?

A: We've always been an entertainment company, going all the way back to the hanafuda cards and our key equities. We're an entertainment company. I think what the Wii U does is further show that our vision is this broader entertainment landscape.

Because in the end the time that consumer spends in any form of entertainment that's not on our device is a missed opportunity for us. It's that type of thinking that led us to create "Brain Age," same type of thinking that led us to create "Wii Fit." It's looking at the broadest landscape possible as to what constitutes entertainment.

Q: Do game companies have to evolve this way because the box and games business is declining?

A: From a Nintendo perspective this makes sense for us because we view ourselves from this broader entertainment landscape. We view every potential consumer as an opportunity. Whether they're 95 years old or 5 years old, we want to create entertainment that's going to speak to that consumer. In our view whether we deliver it in a handheld device or in their home, it's an opportunity to engage with that consumer, make them smile, give them something positive.

You look at the way we've managed the Mario franchise, the Zelda franchise, all our of our key franchise characters, utilizing a variety of different gameplay styles -- it's always been about driving entertainment.

Q: Will future versions of the 3DS handheld be more entertainment focused. Will there be a way to get Nintendo TV onto the 3DS or 4DS?

A: Today you can connect your DS to the Wii in terms downloading demos, downloading bits of entertainment. Second point is one of our key developers has already aid that they're working on a key franchise -- "Smash Brothers" -- that will have some form of connectivity between the 3DS and the Wii U.

Certainly because we manufacture the devices, we can enable some sort of connectivity. But beyond that on your 3DS today you can watch movies, on your 3DS today you can have a variety of deep experiences. We're certainly leveraging the learning we have in the broader space across all of our platforms.

Q: How about things like the timeline -- the interactive chatting about a show in Nintendo TV -- will that come to the future 3DS?

A: It could. But the piece to recognize and the reason we're able to bring that to life is that your signal, from either your cable box or your dish, this system has access to it through the IR codes. ... Who's to say the next iteration, ... the 4DS or whatever it is, might be able to do that, maybe.

But it just highlights the way we think about hardware development is we envision scenarios, we envision what can be done technically, that the current system doesn't do and then we build it into that new device.

For example, if we hadn't built the IR capability into the GamePad, the work we're doing with Nintendo TV couldn't come to pass. That's another key advantage we have, for example, vs. tablets or other handheld device. Not all of them have IR blasting capability. In fact, most of them don't.

Q: Speaking of tablets, how are you going to surface this against all the new tablets this holiday season?

A: We're working very hard to make sure that consumers understand that this is an entire system. It's the console, it's the GamePad itself, it's an entire proposition. It's not just a tablet that you're going to have in your home.

So the first step is really making sure that the consumer understands what is the entire proposition. The second step is making the consumer understand all of these great experiences that they can get that they're not going to be able to get on a tablet, and they're not going to be able to get on a tablet somehow connected to a gaming system like what our friends down the street are trying to do.

The only way we can deliver an experience like "New Super Mario Bros U" or like Nintendo TV is that this is an entire connected system , the way the GamePad talks to the console, the way the console is connected to the TV, the way it speaks to your entertainment provider. Your cable box or your dish provider. That entire ecosystem is what we're providing.

In our view the best way to bring that to life is to talk about the actual experiences, to talk about Nintendo TV and show it is unlike anything you can do today. To talk about the games and show that it's unlike anything that you can do today.

(Below is a screenshot of EA's FIFA Soccer 13 on the Wii U, with control details on the GamePad)

Q: You must have made a decision that linear TV was still going to be first-class on here. Your competitors, say, Google TV, didn't pony up for a guide. You did, deciding that people still watch a lot of linear (broadcast) TV. (Note: Google does not license a standard guide for live TV broadcasts, but a spokesman said there's a "TV & Movies" app available that pulls show data from online sources.)

A: There were just some numbers that were put out that ... in terms of TV viewing households, it's still something like 95 percent of all households. Linear TV is not going to go away, despite what anyone else says. It's certainly going to be driven by sports; it's going to be driven by event type programming. And so for us we absolutely embrace that in the way we're approaching Nintendo TV.

Q: Will you sell this system through Comcast or other TV partners?

A: It's certainly possible.

Q: Why didn't you just buy TiVo and go the whole DVR route?

A: That's not what we do.

Q: I wonder if Nintendo 30 years from now will be seen as more of an entertainment/video company?

A: I think that we already see ourselves as an entertainment company. I think that certainly as we launch the Wii U, as consumers experience Nintendo TV, I think consumers will also see us as a broader entertainment company.

Q: Consumers may also think you're crazy to launch a system built around a tablet and a social network when there's a dominant tablet company and dominant social network already .... How will your Miiverse social network compete against Facebook?

A: We believe we're going to get traction with Miiverse because it's going to be dedicated to your gaming friends and your gaming community.

Here's the example: Yes, I belong to a few different social networks. But on that social network am I going to be posting how, you know, challenging this particular part of this particular Mario game is and asking for help? Probably not.

But I will post that type of information on Miiverse. And that's the difference. We're trying to cater to a specific opportunity around gaming and gaming conversations that we know our audience is passionate about.

Whether they're the most active consumer or whether they're the brand new game player, they get passionate about a game, they get passionate about questions of how to beat a level, the background for a level, what to play next. And we believe all of those social conversations are going to be best served by something like Miiverse vs. an existing social network.

Q: How about conversations about a football game or TV show that they're watching?

A: For those types of conversation, we're letting the consumer decide what's the best social network to use, whether it's through Miiverse or Twitter or Facebook. All of that's possible through Nintendo TV.

Q: Would you prefer that all those conversations happen through Miiverse?

A: For non-gaming conversations, we are ambivalent as to how the consumer wants to have that conversation. But we're passionate that when it comes to gaming, they're going to want to have that conversation through Miiverse.

Q: Are you going to monetize those conversations and social activity?

A: Right now we see it as a service. We see it as something that's going to be free to the consumer and a built-in part of the value proposition that is Wii U. Do we believe that potentially it's going to be a way for consumers to discover more content -- a way for consumers in the end to buy more software? Hopefully.

But we think making sure it's the best service possible for the consumer in the end is going to be good for us.

Q: Consumers might think the Wii U is expensive. Will the price slow the adoption?

A: That's why we've provided the two different price points and the two different SKUs. We certainly think that the basic model at $300 is a fantastic value. We think the deluxe version at $350 with "Nintendo Land" packed in is an exceptional value. We think whether you're looking to spend $350 or only want to spend $300, we've got something for everyone.

Q: What's your view on consumers' spending this holiday season? have they already spent their money on phones, or are they looking for a big new thing this holiday?

A: We think there's a variety of consumer situations out there. We certainly believe that there are quite a number of consumers looking for the next big hot product and looking to buy Wii U. That's millions of consumers.

We also think that there are going to be a few million consumers who are very late adopters who are going to be looking for a lower priced home console that has fantastic games. The Wii is for that customer.

We think that the Wii will have a strong holiday as well because there certainly are many consumers who are still feeling some financial pressure who only want to spend a certain amount of money but still want to play Mario and Donkey Kong and all of these great franchises.

There are going to be other consumers where they want a handheld and we've got a full range of different handhelds all the way from a DSi for $99 to a 3DS XL for $199. So I think that we have positioned ourselves regardless of the consumer's economic situation to find happiness with Mario.

Q: Will the Wii U and its capabilities last you through the next console generation?

A: We think so. It's based on having great graphics, it's based on having a robust online execution. We believe that this system is going to have a very long life, and it's going to be very well supported by third-party publishers.

Q: Will you refresh it through its life by adding big new partners, such as new video partners?

A: Certainly. It's going to be based on who the players are, and how they fit into the ecosystem that we're building. But as we drive the installed base of Wii U, we think there's going to be a lot of additional partnerships there for us to have.

Q: Can you fend off the Xbox 720 and PS4?

A: Once you talk about what that is, we can probably fend it off.

Q: What about goggles? Microsoft may be adding goggles. How can you make it without goggles?

The defining feature of Nintendo's new Wii U is its GamePad controller -- a wireless, touch-screen tablet with a 6.2-inch diagonal screen. (shown here in a picture by Mark Harrison, Times staff photographer)

But that's not challenging enough, apparently. As Facebook surpasses 1 billion users, Nintendo also is launching a new social network for the Wii U, which goes on sale Nov. 18.

Remember, though, that people also scratched their heads when Nintendo released the first Wii and its unusual motion-sensing controllers back in 2006.

That earlier Wii never won over the hard-core gamers, but the company still sold 96 million of the consoles and more than 800 million Wii games. The system made video games more accessible and physical, dramatically increasing their appeal and audience. Microsoft and Sony soon added motion-sensing controllers to their game consoles.

After spending time with executives at Nintendo of America's gleaming new headquarters in Redmond and getting a demonstration of the latest Wii U features, I think Nintendo may have done it again.

I haven't spent enough time yet with the console to be sure, but I think the Wii U has the potential to be equally transformative -- partly with games, but mostly with home entertainment funneled through the console.

In addition to playing full-fidelity games, the Wii U is designed to be an easy, fun and engaging portal to live TV and online video. This capability, dubbed Nintendo TV, looks like the Wii U's killer app.

Perhaps most significant, the system also previews what to expect from the next generation of video consoles arriving over the next year.

With the traditional game business under pressure from mobile and online games and new Web services consuming more of our free time, console makers have recast themselves as entertainment companies. Their systems have evolved into gateways to most everything you could want on your TV.

Starting with the Wii U, the next generation of consoles will be designed from the start to fill this broader role in the home, while also powering the most advanced games.

If they're successful, these systems will be a daily part of your life, whether you're playing games or not.

"The way that would say it is Nintendo TV is certainly going to be something that every member of the family picks up and engages in at least once a day," said Reggie Fils-Aime, president of Redmond-based Nintendo of America. (below, photo by Mark Harrison, Times staff photographer)

"If that helps them get more comfortable with the GamePad, and in the end adds to more games being played, then that's great," he said. "But fundamentally, it's part of the overall proposition of games, TV, plus social."

Nintendo's Zach Fountain demonstrated the setup for me.

When you first connect the system to your TV, it syncs up with your cable, satellite or antenna setup. It also connects with video streaming and rental services, including Netflix, Hulu and Amazon.com.

Then the Wii U GamePad becomes the ultimate universal remote control for your TV. Notably, the system includes a full TV guide displaying broadcast shows available to you via cable or antenna, plus an infrared system for changing the channel and controlling the volume on your TV set.

The GamePad's touch-screen can display a keypad, for searching out shows and movies, or sending messages to friends over Nintendo's network or via Twitter or Facebook.

To encourage these conversations, Nintendo will stream highlighted scenes from the show to the GamePad, so users can comment on a particular passage or something that caught their eye.

The pad also can be used to play a game or watch a streaming video while another show is being displayed on the TV screen.

Lots of devices connect TVs to online services, and increasingly TVs connect to them directly. It's been a capability of the Xbox, PlayStation and Wii for years.

But it's still the early days. Only about 10 percent of U.S. homes are streaming video to a TV set, according to research firm NPD.

One reason is that people still mostly watch broadcast TV, despite all the buzz around services such as Netflix.

Another reason is that the options for streaming video to your TV are still incomplete. Cable boxes handle TV but won't connect you to Netflix or Amazon. Streaming video adapters don't work with live TV broadcasts. Web-connected TVs receive both live and streaming video but their software isn't great and they don't have decent games.

Which remote do you reach for in this situation?

Take your pick: Apple, Google, Sony, Microsoft, Comcast and a dozen others are all battling over this space in the living room, hoping you'll use their software and devices to find and select your next movie.

And now along comes Nintendo, like a Super Mario quarterback, leaping over the pile of linebackers bashing each other at the goal line.

Fils-Aime explained how Nintendo can make this move.

The company has several advantages. It's good at making simple, accessible interfaces. The appeal of its games will bring the Wii U into millions of homes. The company designs and builds its hardware, so it can include things like the infrared remote control.

Nintendo's business model is also key, because it's not competing with the video companies needed to make Nintendo TV a success. Unlike Microsoft and Sony, Nintendo is not running a video store that conflicts with services on its platform.

"Essentially we were the perfect vehicle to drive this type of innovation into the home, whereas all of the other competitors have maybe an issue from a partnership standpoint that is tough to solve," Fils-Aime said.

Instead of trying to become the new cable box, Nintendo wants the Wii U to augment whatever TV setup people are using.

Nintendo also is getting a jump on Apple, which is expected to someday offer a more ambitious TV product than its wireless adapter for streaming video.

Altogether, this positions the Wii U to ride whatever evolution in TV services happens over the five- to 10-year life cycle of the console. Over that time TV broadcasts may shift further toward online delivery, increasing the need for truly universal remote controls.

In the meantime, Nintendo is drawing on the cluster of network and cloud-software expertise in the Seattle area. Fils-Aime said it's done more engineering on the Wii U and its services in this region, where the company now has about 1,300 employees.

It will take awhile for people to figure out where Nintendo's heading this time, but I'll bet a lot of them end up crazy for the Wii U.

PopCap took another step in its layoff plan today, closing its Dublin office and reducing 96 more positions.

Last month the Seattle-based game company began cuts to re-balance its costs as the video game market contracts and moves away from boxed software.

PopCap on Aug. 21 laid off 50 people, mostly in Seattle, and said it was going through a "consultation period" to decide whether to also close the Dublin office.

Today the company released a statement saying that the consultation period in Ireland "has been completed, and after having consulted fully with the employee representatives the PopCap leadership team has decided to close our Dublin office."

The company now employs about 450 people globally, down from around 600 earlier this summer. About 300 are based at PopCap headquarters in Belltown.

The statement noted that PopCap is still growing and hiring for other positions and parent company EA is increasing the size of its customer service center in Galway, Ireland. It's adding 300 positions at the center which now employs 400.

Nintendo finally revealed details of its upcoming Wii U, which will start the next generation of video game consoles amid growing competition from online and mobile games.

The company will begin selling the console - which features a tablet-like controller with a 6.2-inch touchscreen - on Nov. 18 for $300. That's for a model with 8 gigabytes of storage.

A "deluxe" version with 32 gigs of storage and a set of "Nintendo Land" games will cost $350.

"The wait is almost over - in just 66 days, Wii U will arrive with the strongest lineup of software in Nintendo history," Reggie Fils-Aime, president of Redmond-based Nintendo of America, said in a release.

Fils-Aime revealed the launch details at an event in New York. Nintendo first unveiled the system in the summer of 2011.

With the Wii U, Nintendo is also boosting the development of console games that use auxiliary screens to create new control schemes and modes of play. Microsoft's working on a "smart glass" system to connect wireless devices such as phones and tablets to the Xbox 360, and Sony's using its handheld Vita as an auxiliary screen for the PS3.

The Wii U pricing is just under the $399 entry level price of an iPad, but above the $200 price of a basic Xbox 360 console and $250 price of Sony's PlayStation 3. Sony and Microsoft are expected to unveil their next consoles in 2013.

Nintendo also revealed a video application for the Wii U called TVii that connects the console to streaming services such as Netflix, Hulu and Amazon.com, plus live TV broadcasts and TiVo DVRs. It takes advantage of the console's high-definition output and ability to use the GamePad as an auxiliary display and remote control.

With high-def output that the original Wii lacked, plus action-friendly control inputs, the Wii U is attracting triple-A titles such as "Call of Duty: Black Ops II," "Mass Effect 3" and "Assassin's Creed III."

Also featured on the console is an upgrade social and message system to connect players with friends and others using the Wii U.

The $300 Wii U will come in white with a single white GamePad controller, a sensor bar for receiving controller signals and an HDMI cable. The "Deluxe Set" comes in black and also includes a GamePad charging cradle and stand.

PopCap Games is laying off 50 employees, mostly at its Seattle headquarters.

That's nearly 10 percent of the company, which was acquired a year ago by game giant Electronic Arts.

After the layoffs - which happened today - PopCap employs about 550, including about 300 in Belltown.

The majority of the layoffs were in Seattle but jobs were also cut at PopCap's Vancouver, B.C., studio. There may be additional layoffs later at its office in Dublin, Ireland.

It's a jarring move for a flagship of Seattle's cluster of video game companies but the industry as a whole has struggled with declining sales, particularly the plunge in sales of packaged games.

In March the 86-person Redmond studio Zipper Interactive - creator of the hit "SOCOM" action games - was abruptly closed by Sony, which bought the studio in 2006.

Yet other studios are simultaneously expanding. Seattle's Double Down Interactive, an online casino games studio that sold in January for $250 million, pounced on the PopCap news with a spokesman noting that it has more than 50 open positions.

PopCap co-founder John Vechey explained the move on the PopCap blog, saying the company is responding to the broad shift toward free-to-play and social games. PopCap is adjusting its business "to stay healthy and viable," he wrote.

There's also an economic component to the reorganization. To stay in business, we need to manage costs, improve efficiency and maintain a profit. We've been able to invest in creative new games like Peggle and Plants vs. Zombies because we had a high profit business. That business is challenged, and if we don't adapt, we won't be able to invest in new IP. That sounds harsh -- but if we don't stay in business, no more plants, zombies, jewels, frogs or worms.

Vechey said the company has also begun an "exploratory consultation" to decide whether to close its office in Dublin.

"'Exploratory consultation' means we're talking to our Dublin team about the future of that office and whether we can find a path to improve our profitability in Europe without having to close the operation," he wrote.

The announcement comes a day after the company announced that it's preparing a sequel to its hit "Plants vs. Zombies" that will go on sale next spring.

Vechey said the company is simultaneously hiring in different areas, and "we expect to end the year with roughly the same number of people we started with."

"We're glad to have those resources supporting us when a lot of other independent studios are struggling. In addition, some of the people affected by the reorganization may be retrained and reassigned to other jobs in the EA studios. If we didn't have EA behind us, the cuts would have been worse."

"Ski Safari," a deceptively simple "runner" game in which you try to outrun an avalanche chasing you from the left side of the screen. Kapalka called the 99 cent iOS game "probably the coolest one I've seen recently."

"Puzzle & Dragons," a puzzle-monster game (pictured) that really is big in Japan, where it's available through the Japanese version of iTunes. Kapalka is intrigued by the serious player-to-player competition seen in Japanese games and expects to see more intensely competitive games to show up in Western markets.

"Spelunky," a challenging, underground exploration game in which a whip, bombs and other tools are used to progress and to collect treasures. The players' haul is lost when they inevitably die, sending them back to start the section over again. "Spelunky" started as an indie PC game but was released this summer on Xbox LIve Arcade.

Kapalka likes the unforgiving challenge of "Spelunky." PopCap makes games that are more accessible to a broader range of players, but he thinks it's still important to make games hard enough that people feel rewarded when they succeed.

"You do lose something if games are always easy," he said.

Kapalka said PopCap is on the sidelines for now with Nintendo's upcoming Wii U console. "We're going to wait and see how it turns out," he said.

Looking farther ahead, Kapalka predicted a breakout of gaming on Web-connected TV sets. He's not sure if this will be via hardware from Apple, Google, Sony or another company, or through sets that connect directly to the Web.

"That's a potentially crazy thing that could come up in the next year or two," he said.

In his opening keynote speech at the Casual Connect game conference at Benaroya Hall today, Big Fish founder Paul Thelen announced a big plunge into cloud gaming.

The company today is launching "Big Fish Unlimited," an online service that streams games to phones, tablets, PCs and TVs.

The service will cost $7.99 per month for ad-free access to 100 games from 42 developers. There will also be a free version with a rotating selection of 20 games supported by ads.

Big Fish also announced a partnership with Roku to bring the service to Roku's set-top boxes in the fourth quarter.

Thelen made his case for developers to build premium casual games - the sort that people buy and download, as opposed to free, ad-supported titles.

Thelen said the premium market is still growing, with Big Fish seeing 30 percent growth last year. It's also giving the company traction on Apple's iOS platform; Thelen said Big Fish is the fifth highest grossing game publisher on the iPad, ahead of sixth place Zynga.

Yet Thelen still sees big opportunity on the PC platform. Big Fish is now in the process of moving its hit mobile games back to the PC platform where the casual video games business was born.

"We're going to take some of the hit games that are on mobile - namely the tablets - we're actually porting them back to PC-Mac," he said.

To build the cloud service, Big Fish has built a team of more than 100 developers.

Large, 2 gigabyte games are being virtualized on the "Big Fish Unlimited" cloud where they'll be available to play within four seconds.

The "all you can play" service streams games to devices ranging from phones to Web-connected TVs. Big Fish plans to bring at least 1,000 of its games to the cloud service.

Games are played in the cloud - online - where progress is stored, so players can stop and resume at the same place.

Big Fish Unlimited games are played through the browser using HTML 5 technology.

Large applause followed demonstrations of games being resumed on different devices, and pinching and zooming into a cloud game streaming to an iPad.

"When we tested this with customers they couldn't tell the difference between a native game and a streaming game," said Big Fish's Will O'Brien.

Other speakers took a different tack.

Matt Hulett of RealNetwork's GameHouse group said the industry's moving away from paid games and most growth is coming from free or "freemium" games.

"The PC download space is definitely on the decline, it's not a space that's going to grow," said Hulett, whose company also offers downloadable games but is turning toward other models.

Alex Seropian, a founder of Bellevue's Bungie who went on to start several other studios, talked about the big opportunity on smartphones, particularly for games in the sweet spot between casual and core games.

Facebook's Sara Brooks said three genres have done particularly well on the social network over the last year. They include hidden object games; casino and bingo games and casual/arcade titles. In the latter category, there are 75 million Facebook users playing "bubble shooters."

Brooks said the next big opportunities (or at least where Facebook would like to see more games ...) are in core action games, sports games and casual turn-based games such as DrawSomething and SongPop.

Facebook also sees big opportunity for game developers to extend their titles to new geographies, localizing them for markets such as Turkey and Brazil.

This is the seventh Casual Connect held in Seattle by the Casual Games Association. It runs through Thursday with more than 160 speakers covering the casual games business from Apple to Zynga.

Legendary Bellevue game studio Bungie has always had one of the best composers in the business.

Now the studio that created "Halo" is taking things to the next level, bringing in Paul McCartney to work on the score for its upcoming game. Yes, that's Sir Paul, formerly of The Beatles.

McCartney disclosed on his Facebook page that he's working with Bungie's Marty O'Donnell, who is probably the video-game world's equivalent of McCartney. O'Donnell is at left in this photo that McCartney shared over the weekend. It was taken at Abbey Road Studios in May.

Bungie spokesman Eric Osborne said the relationship "developed very serendipitously."

"Paul heard Marty's work, and reached out to him," Osborne said via email. "After a few collaborative writing sesions, it was clear that Paul was going to bring something remarkable to the project."

Also helping bring them together was Blindlight, a Hollywood agency that connects game companies to the entertainment industry, Osborne added.

There weren't any hints about the game that will feature the McCartney-O'Donnell music, but a lawsuit recently revealed that Bungie is working on a massively multiplayer online action shooter called "Destiny," set to be released in late 2013.

Osborne confirmed that McCartney is working on music "for our next game" but said it doesn't yet have an official title.

Activision is publishing the game, which may be the anchor tenant on the next Xbox console.

O'Donnell's soundtracks for the "Halo" franchise have been best-sellers on their own, so imagine what the pairing with McCartney could produce.

Here's my top 10 list of songs I'd like to see on the "Destiny" soundtrack:

Bill Gates plans to do a lot of summer reading - perhaps more than he's done since he was a teen.

He's also sharing his reading list and reviews, and inviting people to recommend other books at his personal web site, The Gates Notes.
On the site, he talks about how he's always used summer to catch up on his reading and used to max out his library card when he was a kid. Now he may get through a book a day on vacations, on which he takes "what is probably a ridiculous number of books along."

An excerpt:

Between family trips and some other travel I'll be doing this summer, I probably have more reading time planned than I think I've had for a very long time, maybe ever since I started work. Still, I'm probably being too optimistic about what I'll be getting to, because I'm taking a ton of books with me.

-"The Better Angels of our Nature" by Steven Pinker
- "The Quest" by Daniel Yergin
- "Deng Xiaoping and the Transformation of China" by Ezra Vogel
- "The Cost of Hope" by Amanda Bennett
- "Behind the Beautiful Forevers" by Katherine Boo
- "Limits to Growth: The 30-Year Update" by Donella Meadows
- "Abundance: The Future is Better Than You Think" by Peter Diamandis and Steven Kotler

Game critics covering the recent E3 show gave their collective "best of show" award to "The Last of Us," a new cinematic action video game title Sony is developing for the PlayStation 3.

The game follows a mercenary smuggling 14-year-old girl from a quarantine zone in a futuristic, post-apocalyptic vision of America. It's being developed by the Naughty Dog studio behind the PS3's hit "Uncharted" franchise. It goes on sale Dec. 31.

"The Last of Us" also received Game Critics Awards for "best original game," "best action/adventure game" and "best console game," as chosen by a group of 34 publications at E3.

LOS ANGELES -- With a tiny drum roll, because my ears are still ringing from the amplified madness of the E3 video-game extravaganza, here are my best-of-show awards.

Weapon of the Year: Composite bow in "Crysis 3."

Maybe it's because of the "Hunger Games" book and movie, but archery is hot nowadays, and every other game at the Electronic Entertainment Expo (E3) seemed to have a bow and arrow.

The biggest is "Assassin's Creed III" in which you play a Native American hero armed with a bow during the American Revolution. It's arriving Oct. 13 on the Xbox, PlayStation and PC.

There's also a "Zelda" mini game for Nintendo's Wii U, on which you use the control sticks to aim and fire a bow and tilt the pad down to refill the quiver.

Disney's on it with an archery game tied to its upcoming movie "Brave." The movie looks great, but the game isn't as inspired. On the PS3 version I played, the archery was oversimplified -- you just pull a stick and a continuous stream of arrows flies out -- yet I still found it tricky to aim. The game is out June 19 on the PS3, Xbox 360, Wii, DS, PC and Mac.

In my favorite, "Crysis 3," there's a composite bow with military sights used to battle through New York City, circa 2047. In the game, the city has been transformed by an evil, faux-green corporation into a spooky, urban rain forest.

The bow is especially useful for stealth attacks when you're made invisible by the "Nanosuit," a trademark of "Crysis," a futuristic, sci-fi shooting franchise.

There's also a crazy assortment of guns in "Crysis 3," but the bow is more challenging. You can choose special arrows such as one that explodes or another that's electrified and zaps enemies standing in water where the arrow lands. The quiver is limited, but you can reuse arrows found in the lush, vividly rendered landscape. "Crysis 3" is coming to the Xbox, PS3 and PC in 2013.Best New Vehicle: Square-rigged battleship in "Assassin's Creed III." As revealed during Sony's E3 event, players get their John Paul Jones on by controlling the ship and cannons to attack British warships. I'm not sure how this will play in the U.K. market.Channeling Steve Jobs Award: Reggie Fils-Aime. The Nintendo of America president gets the award for saying the Wii U will "revolutionize your living room."

Cinderella Story of the Year: British startup Playground Games. The founders (Ralph Fulton shown at left) met with Microsoft's Xbox team two years ago at E3, pitching their experience building racing games. This year they were back at the show -- unveiling "Forza Horizon." Their debut racing/action game is a highlight of Microsoft's fall lineup. It's coming to Xbox 360 on Oct. 23.

Best Trend: Historical fiction. After thoroughly mining the future, medieval realms and wars of the 20th century, now the triple-A game developers are bringing the 1600s, 1700s and 1800s to life on game consoles with gorgeous titles like the "Assassin's Creed" series and "Dishonored," a quasi-Victorian, first-person action game (with a crossbow) coming to the Xbox, PS3 and PC on Oct. 9. If you could filter the violence, these would be the best educational games around.

Gore-Tex Award: Sony's augmented-reality Wonderbooks. The books, which display animated content on the TV screen when they're held in front of a PS3 camera attachment, were one of the few new products that didn't leak before the show.

The hats were used to promote Disney's "Epic Mickey 2: The Power of Two." Second place goes to Microsoft for giving rides around the E3 parking lot in a Ferrari, Lamborghini and other supercars to promote "Forza Horizon."

Motion Game of the Year: "NBA Baller Beats."

I thought "Guitar Hero"-style rhythm games had run their course. But that was before I saw this Majesco title, which is coming to the Xbox 360 Kinect system on Sept. 11. You play using a real basketball, dribbling and making moves in sync with music and the scrolling graphics on screen. You can't play sitting down, and your downstairs neighbors will never forgive you.

Pivot of the Year: Microsoft's "Fable: The Journey."
The game was introduced at last year's E3 conference as a casual, bucolic Xbox Kinect game you could play from the sofa, using arm gestures to control the reins of a horse-drawn cart as you explored an enchanted realm.

That was just the first take. Since then, the creative director left and the game was rebuilt on the Unreal Engine developed for action games. You can still drive the cart from the sofa, but the game -- releasing Oct. 9 -- turns out to be a fast-paced action title in which you race the cart past perilous obstacles, fling spells at hordes of attacking beasties and wave your arms to rip apart zombielike foes.

Booth of the Year: The Videogame History Museum.

It looked like Paul Allen's garage sale, with every imaginable digital toy over the past three decades spread out on folding tables. The Sunnyvale, Calif., organization's booth was irresistible and put it all in perspective.

LOS ANGELES -- Will Nintendo's new Wii U compete with the iPad as much as other game consoles, and will its Miiverse social network challenge Facebook?

And can the console win over hard-core gamers without "Call of Duty" -- or could the blockbuster action game be coming to the Wii U after all?

Those are some of the question I pitched at E3 to Scott Moffitt, the guy in charge of selling and marketing Nintendo hardware and games.

Moffitt joined Nintendo of America as executive vice president of sales and marketing last year. Earlier he was at PepsiCo and Henkel Consumer Goods, handling brands like Mountain Dew, Right Guard and Dial.

Nintendo of America is based in Redmond, but Moffitt works from its marketing office in Redwood City, Calif.

Here are edited excerpts of our chat:

Q: Why is there no Wii U pricing information yet? Is it because you want another round of coverage when the price is announced, or have you not decided the price yet?

A: It's not that we haven't settled it. As is typical with past Nintendo console and hardware launches, we tend to try to announce the pricing and exact SKU information closer to launch. What we've said is the Wii U will be launching this holiday period and we'll make that kind of information available as we get closer to launch.

Q: How does Nintendo define the holiday season?

A: Holiday season really begins October, November, December, but of course the bulk of the sales begin Black Friday weekend, right after Thanksgiving.

Q: Do you see consumers this Christmas choosing between a $399 iPad and a Wii U, or will the Wii U be more head-to-head with other consoles?

A: I believe the competitive consideration set would include our friends from Microsoft and Sony more so than iPad devices. There's just limited gaming you can do on those devices if you really are a gamer that cares for deep, immersive gaming experiences with true button control.

So I do believe our true competition is the other consoles. But I'd say what we're offering is quite different and quite revolutionary so I think we'll compete with ourselves a bit.

Q: Are your primary buyers going to be Wii owners upgrading? A: I think your early buyers are people who love early technology. And that probably is very broadly defined as active gamers that really want the newest, latest, greatest technology in gaming and are very intrigued by the second screen controller, which we call the Wii U, and all the interesting things it enables in home entertainment.

Q: So do you expect a slower build-up with mainstream consumers?

A: No, I think there will be a lot of current Nintendo fans also in that early rush to wait in lines and buy the Wii U. So I think current Nintendo fans that love our franchises and love playing Mario games they know they can only play on our systems will be lining up to buy it. Certainly Wii owners will be intrigued by what this has to offer as well.

Q: Your peers at Sony have told me they saw the PlayStation 3 as the upgrade for Wii owners. What will Wii U buyers be upgrading from?

A: The Wii U is intended for a broad audience. Nintendo's always been about expanding the gaming audience. The potential buyers are very broad. As we showed with Wii, when you bring interesting, new types of gaming the appeal can be quite broad. Once again, we're going to be able to transform the gaming experience, but it goes far beyond gaming. With Wii U there are three pillars to what Wii U offers.

Certainly the integrated, second-screen controller transforms the way people play games. It will transform the way they connect with each other, with Miiverse. It will also transform the way they experience entertainment in the home. It's connected automatically to the internet, to your game console and you have the controller. That seamless connection creates lots of interesting entertainment possibilities as well as game possibilities.

Q: You have some new games for hard-core gamers but I didn't see "Call of Duty" or "Battlefield" for the Wii U. Can you get the core gamer if you don't have those titles on there?

A: E3 for us is all about games. We're focusing on that first pillar of the three pillars of what E3 can offer. Over 20 games were unveiled. That's a pretty broad lineup. But I can assure you even more games will be coming during the launch period so if there's a favorite game that gamers like, I think there's a good chance it will be coming to the platform. .... I would expect that gamers will see an immense array of first- and third-party content at launch.

Q: That's interesting. You're coming after the core strongly during what's going to be a big core season, with big titles coming out and the other consoles positioned for core gamers. Will most of your sales be to the family audience?

A: I wouldn't say that. I think Wii U is intended to reach a very broad audience. There's a lot that a core gamer will really appreciate in the system when they get into it and they see a game like "Batman Arkham City.

Yes, it's a game that was released last year but when you see how you can play it differently and what new kinds of experiences are available when you play it on the Wii U game pad. It really opens up and we think, could make it the preferred way to play some of those core games.

Q: How are you going handle parental and family safety issues around the Miiverse social network? Will there be age restrictions on its use?

A: There will be traditional parental family controls, as you'd expect with that. The Miiverse, we really haven't talked much about that yet, but it's a really interesting idea that will transform social connections both within game play and beyond game play with broader entertainment.

When you power up your system, you'll see this Mii plaza with not only your Mii but also the Miis of your friends and your neighbors and other people you're gaming with, but other people from your region or across the world. You'll see where they're congregating, which indicates their preferences for gaming or other entertainment.... We think it will enable fun interaction with households across the country and with gamers of all abilities.

Q: Will it be open to players under 13 years old?

A: It's open to gamers of all ages but you can set your parental controls, your parental restrictions, as you like.

Q: Will there be any bridges between Miiverse and say Facebook or Twitter?

A: We haven't announced anything in that area yet.

Q: Will you do more things wth the network and online services, for instance online storage and photo sharing?

A: We haven't announced any of those capabilities yet, but I think you're imagining several possibilities that have already been thought about.

We've also thought about how would you connect this new Nintendo network with your 3DS, your handheld gaming system, so you could certainly imagine lots of ways to connected all your gaming devices and enable some of the functions you're talking about. But that's not ready, that's not going to be announced at launch.

Q: Will the Miiverse become the primary way people connect online with friends and family, or is it intended to supplement other networks and message systems?

A: It's not meant to replace things people are doing on Facebook or other things. It's really not a competitor for those. It's a game-centered network. So it's meant to be a place to share gaming and entertainment content so it really inverts what Facebook does.

Facebook is a broad social network, it has a gaming aspect to it. This starts with gaming and enables some of the communication and interaction that consumers have become accustomed to with these other social networks.

Q: How will you benefit from having pole position in the next generation of game consoles?

A: I think Nintendo tends to launch new consoles when the technology and when the imagination is there to create something new that enables a richer and more interesting game experience. We don't have a set clock when we want a new console or a new piece of hardware to come out.

When we feel we have something that can elevate game play and transform the experience, that's when we'll bring it out. But certainly I would imagine being first will influence consoles that come from other manufacturers.

LOS ANGELES -- Here's Nintendo's video providing an early peek at the redesigned Wii U and its touchscreen GamePad controller, which now has dual control sticks.

A new button on the pad also turns it into a fully independent TV remote control, plus it works as a browser and messaging console, Nintendo President Satoru Iwata explains in the video.

By releasing the video over the weekend, Nintendo got a jump on Microsoft's Monday press event, but Nintendo's still holding most details of its new console until its event on Tuesday morning.

The video mostly explains the company's thinking behind the new console, which Iwata said is designed to produce more smiles, more laughs and more empathy.

Among the cool demos in the video is a game with throwing stars that are flicked at targets on the TV screen by sliding fingers across the Wii U controller's touchscreen. It shows up about 8 minutes into the video.

At 8:40, a new version of the Wii baseball game is shown, with the motion-sensing control pad used to "catch" a ball by moving it around and centering the ball within a circular reticle representing the glove.

About 26 minutes in, the controller is shown being used as a browser separate from what the console is displaying on the TV. If you find a website or a photo that you want to share with others in the room, it can be "flicked" to the TV's larger screen.

The Wii U will bring Nintendo up to par with the Xbox and PlayStation in supporting hard-core games, and Nintendo is even offering a new Xbox-style controller called the "Pro" that will be sold separately.

Iwata also gave gamers at E3 and others following the news context to understand what Nintendo was trying to accomplish with the Wii U. In addition to creating a high-def version of the Wii that supports more advanced games and video services, Nintendo had more worldly concerns.

The company wanted to build a device that people would enjoy together, rather than use in isolation like some new technologies that can have people sitting in a circle staring silently at their gadgets, being "alone together."

It accomplishes this both with interactive games and sharing features and the new "Miiverse" social network based on players' Mii avatars. Iwata said the communications via this network will be done mostly through the Wii U controller, which Nintendo considers a "social window." Eventually the system will be accessible through smartphones, PC and tablets -- basically any Web-enabled device, Iwata said.

RANCHO PALOS VERDES, Calif. -- Zynga Chief Executive Mark Pincus said things haven't changed too much for his social-gaming company since it went public in December.

Zynga and its close partner Facebook underwhelmed investors, but Pincus said the newly public Internet companies are strong regardless of their stock price. He's being interviewed by Kara Swisher, co-host of the All Things D conference.

"The crop of companies that have recently gone public are awesome businesses that have real revenues and profits and real products and services that fit in our lives," he said. "So I'm optimistic about those companies and not really trying to figure out whether the market's valuing them right."

Asked about the relationship with Facebook, Pincus said Zynga grew the fastest on Facebook's platform so "we kept doubling down on Facebook," which led to its business being "concentrated" on the social network.

"I think they're really important, not just to us," he said. "I think Facebook is providing a key part of this new stack. There's an app stack and a social stack and they happen to be key in both."

The social stack enables game companies to build titles that players can easily connect and play with friends, for instance.

Pincus suggested Facebook isn't as important as the general Web for distribution and it hasn't yet provided the same sort of platform on mobile devices.

"Right now I'd say we all have a need for a Facebook on mobile in the sense that mobile is this great explosive opportunity but it's still really fragmented," he said.

Asked by Swisher about the Facebook relationship three or four years ahead, Pincus said: "Faceobok will continue to be very important on the Web and PC. Facebook has the potential to be very important to all of us on mobile."

In the meantime, Zynga wants to do more than develop games and produce "the most powerful and capable" platform for networked games and apps.

"We need more aggregated channels, we need more ways for people to find, discover new apps and even more importantly find their way back to apps they have been engged in. We think we can help with that," he said.

Elite game studio Bungie will release its new series of sci-fi action games starting in the fall of 2013, according to a legal filing that reveals details of what the secretive Bellevue studio has been developing since it split up with Microsoft.

Bungie created the hit "Halo" series for Microsoft then spun out of the Redmond company in 2007 to pursue its own destiny, which turns out to be the code-name of its new game franchise.

The Los Angeles Times found details of "Destiny" in a contract that was filed as part of a lawsuit involving Activision, the publisher that hooked up with Bungie in 2010. The suit is between Activision and former employees involved with its "Call of Duty" franchise.

The contract discloses that the first installment of Bungie's new "massively-multiplayer-style" action shooting game "Destiny" is due in the fall of 2013 for Microsoft's Xbox 360 and the next version of the Xbox, which the contract calls the "720."

Bungie is contracted to release new versions every other year, alternating with expansion packs dubbed "Comet" that will begin shipping in the fall of 2014, according to the report.

Bungie and Activision are also planning to release the game for the PlayStation 3 and its successor, the PS4, in the fall of 2014.

Bungie is not developing "Halo 4," a new installment of the Xbox franchise that Microsoft is developing itself for release in November.

Microsoft hasn't said when the next version of the Xbox will go on sale but the Bungie contract suggests that it could happen in the 2013 holiday season, with "Destiny" as a key launch title. That would be similar to the way "Halo" was a cornerstone of the first Xbox launch in November 2001. An Xbox spokesman declined to comment on my theory and referred questions to Activision and Bungie.

Among the tidbits in the contract: Bungie may receive up to $140 million in advance payments before Activision applies "overage" penalties.

If the game receives average critic ratings of at least 90 on gamerankings.com or a comparable service, Bungie receives a $2.5 million bonus.

The contract also discloses that Bungie's working on a version of its early hit "Marathon," which is described in the contract as "iVlarathon," a future "action-shooter interactive entertainment software product." Activision placed limits on how much staff time Bungie can devote to the next project during the development of "Destiny."

Last week a new version of the open-source "Marathon 2" game engine was released. Here's "Marathon" artwork from Bungie.net:

The truly inside story of starting the Xbox and Zune businesses at Microsoft was shared in a remarkable lecture Friday by Robbie Bach, the retired president of the company's entertainment and devices business.

Bach shared his unique perspective on why the Xbox was a success and the Zune was not during a presentation on intrapreneurship, or how to operate like a startup and launch new ventures within a large, existing business.

The lecture included advice for companies looking to foster entrepreneurial culture, and for all sorts of entrepreneurs entering competitive new markets. It was a breakfast event held by the Northwest Entrepreneur Network in South Lake Union.

Bach described the corporate retreats where the Xbox business was hatched and how Sony fumbled its lead and gave Microsoft the opportunity to get ahead in the console business.

"When the luck happens, you take advantage of it and run with it," he said.

It also helped that Bach's startup had $5 billion to $7 billion in funding available, he joked.

That wasn't enough to help the Zune, though. Bach admitted that Microsoft quickly realized it was too late to prevail in the portable media player business and in hindsight he would have built a music service rather than devices. Apple executed well and didn't give Microsoft the sort of breaks it had in the console business, he noted.

Bach's now focused on philanthropic organizations, serving on the board of audio gear company Sonos and looking to buy a mid-size family business like the food-service supplies distributor that his father operated in retirement.

Here's a raw video of the event. Apologies for the quality; it was taken with a new smartphone that was supposed to capture high-def video ...:

One of the major competitive events in video gaming is coming to Seattle this summer.

Bellevue game giant Valve is holding a $1 million "Dota 2" tournament at Benaroya Hall over Labor Day weekend. The event coincides with the PAX gaming conference in Seattle.

Valve began the annual tournament last year with an event in Cologne, Germany, where 16 teams competed in a group-stage, double elimination playoff format for the $1 million prize. The runner-up team received $250,000.

Total payouts in the Seattle tournament will be at least $1.6 million, according to an interview Valve's Erik Johnson gave fan site joinDota.

"Dota" is a wildly successful, multiplayer, online fantasy game derived from "Warcraft III." Valve's now testing "Dota 2" and plans to release it for the PC later this year.

Details such as ticket information will be released in the coming weeks, Valve said in a brief news release.

Here's a Valve image of last year's winning team, from Ukraine:

To get an idea of what's involved, check out this video of last year's finals:

After years of begging by fans and merchandise vendors, Seattle's PopCap has decided to start producing licensed products, such as toys and apparel.

The game studio today announced deals with merchandisers that will begin selling PopCap gear this spring and through the rest of 2012.

PopCap has a big incentive to boost revenue. If the company meets sales targets in 2012 and 2013, the founders will get up to $550 million from Electronic Arts under the $1.3 buyout deal the companies reached last July.

Licensed products have been a cash cow for other game companies, notably "Angry Birds" creator Rovio.

But PopCap's licensing manager downplayed the revenue angle.

"The revenue will not be insignificant but it's not our focus," said Brennan Townley, who joined the company last year to manage brand merchadising and licensing.

Townley said his position was created prior to the EA deal. When he joined his first job was to go through hundreds of inquiries for licensing deals that had accumulated over the last three or four years.

"We're not necessarily looking at this as 'how are we going to monetize and make money on this,''' he said.

PopCap has never sold licensed products outside of some products now sold in China.

The first products available are "Plants vs. Zombies" wall graphics. T-shirts will appear in retail over the next few weeks and figurines and plush toys should be in stores by the holiday season.

We'll have to see if these zombie pants are available in time for Father's Day and graduation season:

More TV services are now available for the Xbox. But they're not for cord-cutters.

Instead, they're designed for people who already subscribe to those services, and want to extend them through the game console to another room in the house. They also require console owners to subscribe to Microsoft's premium Xbox Live service.

Perhaps this will lead to the Xbox doing double-duty as a cable box -- as it does in some regions overseas already -- but for now the additions mostly bring the console's video options in line with wireless TVs and streaming video adapters. It also showcases the ability to use the Kinect sensor as a remote control using voice and gestures.

Either way Xbox users are taking to the entertainment services. Usage of entertainment apps on the console has doubled over the last year, overtaking the time spent playing multiplayer games on the system, Microsoft said in its release.

Subscribers to Xbox Live Gold service now spend an average of 84 hours per month on the service, and its Zune video store is now the world's second-largest online video store, the company said.

Video consumption via the Xbox is likely to grow further after today's announcement that Comcast, HBO and MLB services have joined the console's video lineup, nine months after they were announced at last June's E3 game conference. The lineup was confirmed in October and began appearing in December -- helping to goose holiday sales of the console -- but it has taken awhile to get the lineup filled out.

Comcast, in particular, appears complicated. The company isn't providing the same on-demand library on the console as it provides through cable boxes and other devices, according to documentation called out by bloggers over the weekend.

Comcast also is excluding content streamed to the Xbox from data consumption limits that it applies to broadband customers, raising a net neutrality question around preferential treatment the dominant cable company is providing to its own video service, Ars Technical noted.

To receive the Comcast video via the Xbox, you need to have the console, a digital cable subscription and a digital cable box in the home.

UPDATE: On top of all that, glitches caused problems for some people trying to set up the Comcast Xfinity app, according to blogger Ed Bott. Perhaps this helps explain why it took so long for the app to appear.

The HBO Go app brings HBO's full catalog to the console, where it's searchable by voice. That's if you already subscribe to HBO through a cable provider.

UPDATE: It turns out the app won't work on an Xbox for Comcast Xfinity subscribers, because Comcast and a few other large cable providers aren't supporting it. The statement from HBO spokeswoman Laura Young:

Comcast/Xfinity, Time Warner Cable and Bright House are currently not supporting HBO GO on Xbox 360. They do, however, support HBO GO online and through the HBO GO mobile app (iPad, iPhone, select Android smartphones).

We believe that HBO GO is a great enhancement to the HBO subscription so we remain hopeful that all of our distributors will support the service on all platforms in the near future. We encourage our subscribers at non-participating television providers to reach out to their provider and request that they add support for HBO GO on Xbox 360.

MLB.TV is providing customers of its premium-level pay TV service 2,430 games (not 2,429 or 2,431 ...) to watch in high-definition live or in a condensed recap format on the Xbox. The service provides home and away broadcast feeds for out-of-market regular season games "where available," according to the release. It can be controlled with voice and motion controls using the Kinect sensor.

If Microsoft is ever going to have its Alec Baldwin moment, it will happen because of a home-brew game called "Wordament."

Baldwin was famously thrown off a plane in December because he wouldn't stop playing an addictive word game on his iPhone.

The actor was playing "Words With Friends," Zynga's Facebook version of Scrabble played by more than 8 million people a day.

So far the closest thing on the Windows Phone platform is "Wordament," an extracurricular project of two Microsoft employees that became a surprise hit after its debut last year.

The free, ad-supported app is a twist on the word-hunt board game "Boggle." You compete with players around the world in two-minute matches and work your way up leader boards.

It's still a pipsqueak in the broader world of mobile games, with hundreds of thousands of downloads since it appeared on Windows Phone in April 2011 and on Windows 8 last month. It has tens of thousands of unique visitors a day, with up to about 650 playing together at once.

But as one of the highest-rated, exclusive games on those platforms, it's positioned to lift off. It may even draw people to Microsoft's fledgling mobile devices, at least if they're "Boggle" fans.

The game was created as a side project by John Thornton, 37, and Jason Cahill, 38, who worked on the Windows Live photo team and had offices next to each other. They built the game after Microsoft began a "moonlighting" program in 2010, encouraging employees to build Windows Phone apps in their free time.

Thornton (left) began tinkering with word games and made a New Year's resolution in January 2011 to build an app a month. One was a prototype puzzle game he showed to Cahill and asked if he wanted to help. The answer was no, initially.

Cahill (right) and his wife were "Boggle" fans who played against each other wirelessly on Nintendo DS handhelds. The more he thought about the possibilities of a computer-generated game board connected via Internet services, the more excited he became about the project.

"I went home after telling him this whole lecture on how the way you get ahead at work is by doing work and not by doing moonlighting ... and ground all weekend,"Cahill said. "I came in Monday with a basic implementation of a service and a set of puzzles and I was like, 'OK, can I help on this half' ?"

This still cracks up Thornton.

"He must have coded the whole weekend after telling me no," he said. "It was kind of funny."

Thornton said the game's popularity sank in for him a few months later, at the Kirkland Fourth of July parade. Looking over the shoulders of a row of people in front of him, he noticed they were all playing the game.

Later that month, the Xbox Live group asked them to distribute "Wordament" through the game service. The Xbox group then hired them, where they're now the principals of a new studio expanding "Wordament" and developing new titles.

I heard about "Wordament" last year from a friend and fellow "Boggle" fan at Microsoft and was planning to write about the game after the Windows 8 preview version (left) was released in February. But I waited, partly because the game froze on a Samsung Windows 8 tablet I've been using. I wondered if the newsroom installed some kind of filter, because I'd spent so much time testing "Wordament" on the tablet.

Finally I got in touch with Cahill last week, and he explained that the Windows 8 version is a prototype and they're preparing a fix for the "suspend/resume" issue I encountered. Meanwhile, the trick to unfreezing it is the "downward swipe" gesture that closes and exits Metro-style apps.

The game can be played with a mouse but it works best with touch-screens, on which you mark words by sliding your finger across the letters. Speed and responsiveness are critical, so the game's a good way to sample the performance of a phone or tablet.

"Wordament" seems to be a game that Xbox Live could use to expand on platforms such as Apple's iPhone and iPad.

I wonder if "Wordament" will end up preloaded, alongside "Solitaire," on Windows Phones or Windows 8 tablets when they appear later this year.

The original goal with "Solitaire" on Windows was to teach people to use a computer mouse, so perhaps "Wordament" will help familiarize people with the new Windows 8 touch gestures.

That would propel the game into the "Words With Friends" league.

It could also offset productivity gains promised by the new software, though, and potentially cause problems for Alec Baldwin types.

Goldfein mentioned that when she was a young girl, her grandmother introduced her to logic games.

One reader asked what sort of games Goldfein would recommend for kids, because he'd like to encourage his daughter and nieces to consider computer science.

I passed the question along to Goldfein, who said a childhood education expert is probably the best person to ask. But she provided an "anecdotal" answer and listed a few games that her daughters play.

The modern-day equivalent is undoubtedly Sudoku (and in fact I'm an avid Sudoku'er and my daughter at age 6 started enjoying Sudoku herself).

But my broader answer is that it's not the puzzles themselves that matter. You can't toss a book of kids Sudoku puzzles at a 6-year-old and expect her to be interested. My daughter was interested *because* she saw me with my nose in a Sudoku book all the time. So the best games and puzzles to encourage are either ones you do yourself, or better yet, ones you will do with her. That can start with card games like Go Fish and Uno. Anything with sorting and matching and counting is great foundations for logical reasoning.

There are lots of great counting and sorting oriented board games, and then you know, we live in a golden age of casual video games for kids. There are so many wonderful smartphone apps and Web apps. My kids play a ton of them, from overtly education oriented ones (like Zoodles) to simple strategy games like Glitch or Pocket Frogs or Gaia -- which actually require a lot of counting and logical reasoning skills, and have cute graphics and addictive game mechanics. Even more importantly, they are games the adults in their lives are interested in playing with them!

My bottom line is the best game is one that you're going to do with her, and not its raw educational content. I do think parental investment and modeling is the biggest factor of all. (Plus, and you may have seen this covered elsewhere, but all the good research findings we're getting now about how we need to praise our kids for effort and not traits.)

I also posed the question to Douglas Clements, a distinguished professor at the University at Buffalo, State University of New York, who has written 18 books and hundreds of publications on early childhood education, math education and related topics.

Clements said that it's a huge question. Lots of games have a variety of math and logic skills, and a myriad of factors pique people's interest.

Microsoft is resurrecting one of its oldest franchises, "Flight Simulator," with an entirely new game called "Microsoft Flight" that's debuting on Feb. 29.

But instead of a new installment of the hyper-realistic, encyclopedic simulator that mostly appealed to flight enthusiasts, Microsoft built a smaller, more accessible game that's going to be offered online for free.

Planes can be flown simply by moving a mouse around, though enthusiasts can also use more realistic and complex controls.

It's also a new business direction for Microsoft's PC game business, which is using "Flight" to experiment with free online games monetized through microtransactions. About 80 percent of U.S. gamers now play such titles, mostly through Facebook, where players spend an average of $29 per month, according to Parks Associates research.

To start, the game will let people fly around Hawaii - the Big Island - in planes including a Boeing Stearman similar to one displayed at the Museum of Flight. For $20 players can get seven additional islands, new missions and an additional plane.

Microsoft will periodically offer new territories, planes and activities. The company may also extend the franchise to other devices beyond the PC. Executive Producer Joshua Howard hopes the game will draw more than 20 million players eventually.

Howard (left) leads a studio with about 50 employees, a third of whom are veterans of the ACES Studio behind "Flight Simulator" that Microsoft wound down in 2009.

Here are edited excerpts of an interview this week with Howard:

Q: Gaming on Windows has seemed to languish, maybe because so much energy was around Xbox. How much is this release a sign that the Windows game group is back, especially with Windows 8 coming up soon?

A: Some folks on my team will say Games on Windows isn't what it used to be. You're forgetting it is certainly the biggest platform for gaming anywhere, ever. I feel like the PC has been the most successful platform when it comes to gaming because gaming as a whole has become mainstream - 75 million people playing Facebook games of one form or another, that's all on a PC. It didn't happen on a console, it didn't happen on a closed mobile platform.

As Microsoft - to have built that system and allowed that to happen - we don't get to take credit for everything people do on a PC but that didn't happen because we ignored PC gaming. So I think PC gaming is alive and well in fantastic ways in fantastic ways. It's still where the heart of innovation is happening.

Q: I didn't mean PC gaming as much as PC game development within Microsoft. Perhaps the company felt it no longer needed to seed the market so much?

A: It's doing very well so that's right, maybe that's part of what it came down to.

Q: Is Flight intended to seed online services and bring people into Microsoft's online realm?

A: I like to think this is both about reimagining a franchise that we know has always been successful. I also think it's part of Microsoft the studio saying 'I want to develop this new muscle.' Maybe because we have so much of the organization focused on the console-side of the business which is more rigid when it comes to business models, you get to ask the PC side to be a little more experimental, a little more exploratory. I relish that opportunity and the team has really jumped on that. We couldn't be doing half the things we do here on a console - this is not a console game that just happens to sit on a PC. This is really a PC game and we're proud of that.

Q: Is your studio just building this title?

A: I imagine this is a group of people who will continue to bring flying experiences out over time. This is where we are right now.

Q: One you've developed new muscles, you want to keep using them ...?

A: There are a lot of really cool, exciting platforms on the horizon. I'd love to think that someday you'll be hearing from me about how we're going to bring Flight to those exciting opportunities.

Q: On tablets and other devices with Windows?

A: It could be broader than that even. As a division we no longer organize around your PC games and your console games. We're a team that's about the thrill and experience of flight.

Q: But it makes sense that your games could be on the new PC form factors running Windows ... like tablets, maybe TVs - the "three screens and a cloud"?

A: Yeah. I believe in crawl, walk, run. We're rebooting a franchise, and that was really hard. We wanted to this well. We took the time and energy to do that. Now this becomes a platform to keep going.

Q: Is it running on Azure and will it be used to showcase the platform's ability to run a massively multiplayer online game?

A: The services could be on Azure but they're not today. It turns out they didn't need what Azure provides as far as scale goes. It's less MMO in that sense. While do have what we think of as interesting and enjoyable multiplayer, it's still not that massive. (Up to 16 players can play together in an online session.)

Q: So the focus is on the PC experience mostly?

A: Yes. The way we talk about it is between the client, and the web site and the community that combines them, that's what Flight means. It's this combination of those three elements working together.

Q: It sounds like a hybrid PC game.

A: Exactly. In many respects we are like an MMO business would be run, we just don't happen to be an MMO. We're taking what is traditionally a game studio and transitioning it into an online business.

Q: Why did Microsoft take so long to resume development of MMO PC games?

A: I think the reality internally is we've continued to incubate and play and continue to try things. You just don't always bring those to market or out until you believe you've got something you can be successful with. I was excited to see that instead of trying innovate in these genres that are already well-understood, Microsoft went off and tried Kinect. I think Microsoft just put their energies elsewhere and it paid off.

Q: Will you sell the game on discs at retail?

A: Sometime maybe in the future but right now we're all in online. Retail is not something we're talking about right now.

Q: Will you get it preloaded with PC hardware?

A: Possibly.

Q: Will it be part of the game suite included with Windows 8?

A: Probably not. We deal with those separately - that's an operating-system business, we're a game publisher.

Q: Will you be able to control the game with gestures, if you attach a Kinect sensor?

A: We're not talking about Kinect support at this time but who knows.

Q: It seems like the tradeoff you made - building richer, smaller locales to explore in the game - is the loss of the full, open world that could be explored in "Flight Simulator"?

A: The bet we've made is that to the non-hardcore simmer, flying the whole world isn't as interesting when there's nothing really interesting to see or do. I do get that for some segment of the audience that was one of the values - I can fly anywhere, into any airport, 25,000-odd airports was crazy.

But I think as you try to broaden and you want to bring in not the next million or two but the next 20 million or 30 million people, you say I will err on the side of more interesting area that's dense than the same amount of content spread all over the globe. There's a lot to do in Hawaii, and Hawaii is gorgeous.

Q: It seems inevitable that you'll have a mobile version someday?

A: We may do other stuff in the future but today we're just talking about the PC version of flight. I think Flight has legs. This is a franchise that's going to keep living for a lot of years. We're going to do that by exploiting all the opportunities that are coming at us, whether that's mobile, new operating systems, new hardware. There's a lot of stuff out there and I think Flight is going to be part of that at some point.

Q: I thought the ACES studio was fully shuttered back in 2009?

A: The reality was inside the company there were already efforts underway to bring that core expertise back together with a new mandate of how they could move forward.

Q: Will Flight make more money than Microsoft's "Gears of War"?

A: I think in the long-run, this franchise will definitely make more money than "Gears." I think Gears is a great. Flight is one of those evergreen franchises in entertainment - this will live another 30 years.

A new game studio in Bellevue surfaced today with plans for an online title targeting the "hardcore social gamer."

U4iA Games is developing what it calls an "online-only, hardcore fremium, first-person social game" that will be released in 2012.

Studio founders previously worked on core games such as "Call of Duty" and "Doom," plus "Guitar Hero," "Spider-Man" and "Tony Hawk's Pro Skater."

They already have 14 employees at offices in the QCB office park on 156th Avenue Northeast.

"U4iA Games is grounded in the insight that core gamers desire robust, social gaming options on social networks and mobile devices," Dusty Welch, chief executive, said in a release. "Playtime and dollars are starting to migrate from console to casual and/or mobile gaming and a new segment is emerging - the Hardcore Social Gamer."

Welch and and co-founder and chief creative officer, Chris Archer, earlier worked at Activision.

Archer moved to the Seattle area from Los Angeles last year to head Sony Online Entertainment's Bellevue studio, then Sony shuttered it in March. He was offered a position at Sony's studio in San Diego but opted to start a new studio instead.

A combination of self-funding and angel investment raised $1.5 million to start the studio, which is now raising $5 million in funding.

Nintendo today launched the 3D video service for its 3DS handheld game player, which went on sale in March.

Called "Nintendo Video," it provides free, downloadable short videos and movie trailers that can be viewed in 3-D without special glasses on the 3DS.

It follows the release last week of a Netflix app for the 3DS, and Nintendo Video in Europe and Japan.

Videos are downloaded to the device via Wi-Fi.

Content will include movie trailers, sports and action clips and music videos, including an exclusive from Ok Go coming July 27. Exclusive content will also be provided by CollegeHumor, Jason DeRulo, Foster the People and Blue Man Group.

Microsoft and Sony are making their game consoles into entertainment hubs with access to proprietary online video stores that rent and sell movies and TV shows.

Nintendo may be heading that direction, but it's not there yet with Nintendo Video.

When I asked Nintendo whether the 3DS video service will offer full-length TV shows or movies, a spokeswoman said the company "hasn't announced anything about full-length content."

Asked about the potential for Nintendo Video to become a store for movies or TV shows, the spokeswoman provided this response, which I think means 'not at this point':

Nintendo Video is a free, one-way delivery system. Once it is downloaded, videos sent by Nintendo update automatically, so there is no way for users to interface with the service beyond choosing which videos to play.

It seems likely that Nintendo Video will evolve and add more capabilities, especially after the company introduces the Wii U with 1080p output. The company's president, Satoru Iwata, told me in June that video services will work well with the upcoming console in part because of its ability to stream content to its portable controller screen.

Check out the Star Wars themed Xbox 360 console that Microsoft and LucasArts unveiled today at the Comic-Con convention in san Diego.

The console is designed to look like R2-D2, and it comes with a C-3PO controller. It also has a white Kinect sensor, which comes in a $449.99 bundle with the new Kinect Star Wars game and is now available for pre-orders.

Microsoft also revealed a new Podracing mode for the game that will be released in time for the upcoming holiday season.

The fate of Seattle's PopCap Games -- one of the most respected studios in the region and the industry -- is now in the hands of a giant California company that has zigged and zagged across the Northwest for more than a decade.

Electronic Arts (EA) has bought and moved studios and hired and fired hundreds of developers from Seattle to Vancouver, B.C., as its strategy evolved, new trends in gaming emerged and fresh ideas surfaced along the Salish Sea.

The selling price of EA's acquisition of PopCap last week -- $750 million in cash and stock and the promise of a $550 million performance bonus -- may offset concerns about the future for PopCap's 500 employees.

But the question of what's next still looms over the studio and other acquisition targets, such as Bellevue's Valve Software and Seattle's Big Fish Games, as well as numerous other tech companies that are in play as deal making heats up.

For some perspective, I chatted with Mike O'Brien, co-founder of another local studio that started the same year as PopCap and was also scooped up by a huge, publicly traded game publisher.

O'Brien, 40, is president and executive producer at ArenaNet, a Bellevue studio with 270 employees who build and run "Guild Wars," one of the world's most successful multiplayer online-game franchises. Seven million copies of the fantasy, role-playing PC title have been sold; now, ArenaNet is nearly done with "Guild Wars 2." (Screenshot above.)

O'Brien is confident the game will overtake "World of Warcraft," the market leader produced by Irvine, Calif.-based Blizzard Entertainment, where he and ArenaNet's other founders worked before starting their studio in 2000. (He's pictured here in yellow, perched on his desk during a recent press event at the studio.)

Looking for a location away from Blizzard, they chose Seattle, where the tech scene was going full tilt and Microsoft was a fountain of software talent. Among the crowd of startups were three other game developers who moved up from California and started PopCap at the same time.

"We talked with all the different studios in the Seattle area -- it was an exciting place, an exciting place to be founding a game company," O'Brien said. "Some of those companies have grown up around us."

That vibe continues, he said.

"I don't know if people outside the game industry appreciate it. You look around and it's Microsoft, it's Boeing and it's T-Mobile," he said. "I don't know if they appreciate what a thriving game-development community there is in Seattle. We may be the top -- and if not the top one of the very top -- game-development locations in the country."

Different routes

ArenaNet and PopCap took different routes. PopCap was largely self-funded, making relatively inexpensive, downloadable PC games. It didn't take outside funding until 2009.

ArenaNet needed more funding sooner, to build a huge and costly online world that would take years of work before the first sale. It started with venture financing, then began looking for a large industry partner in 2002. It ended up being acquired by NCsoft, a large Korean game publisher that used ArenaNet to build its presence in the United States. NCsoft later expanded in Seattle, opening its U.S. and European headquarters here in 2008.

In deciding whether to sell, the team chose to avoid being "in a position where we were scraping for every dime trying to build No. 1 games with lack of resources to do it," O'Brien said. "Being an internal studio really gave us the resources we need to compete at the top of the industry."

O'Brien doesn't know how things will turn out for PopCap, but he said being acquired was great for ArenaNet.

"It was just kind of a perfect fit from the beginning," he said, recalling how the companies clicked from the first pitch to NCsoft executives. "We were giving them the presentation and they were completing our sentences for us."

ArenaNet kept its autonomy and creative direction, in part because it has enthusiastic support from NCsoft Chief Executive Taek Jin Kim, a gamer and game designer. O'Brien said their conversations tend to be about game design, and Kim wants "to make games that he's proud of, that gamers are going to love and that are going to be the No. 1 games in the industry."

Most important, ArenaNet found a buyer willing to wait until a game is fully polished, instead of pushing releases out to meet a quarterly earnings target. It's among an elite group of studios that can say they'll ship a game "when it's done" because quality is more important than the schedule.

That's rare, "but the companies that can do that create the games that gamers most look forward to and sell the most copies," O'Brien said. (Here's a screenshot from "Guild Wars 2" which will have underwater play.)

Others in that category include Blizzard, Valve and Bungie, the Bellevue studio that created the "Halo" franchise for Microsoft. PopCap has also been in this group, and co-founder John Vechey last week told me it will continue making games "at the same glacial PopCap pace."

O'Brien said EA has been through "some seismic shifts over the last 10 years" as it tried different strategies. "I would be nervous as an EA employee -- is there going to be another one of these dramatic shifts?" he said.

One of the last temblors was during the downturn in 2008, when EA laid off 1,000 employees and closed the downtown Vancouver office of its marquee Black Box studio, consolidating the creator of its "Need for Speed" racing franchise into a Burnaby, B.C., campus.

NCsoft has also made adjustments, including a 2008 reorganization that led to nearly 100 layoffs in its Seattle-based NCsoft West organization. But O'Brien said it's been steadied by having a "singular mission" to make online games.

The parent company has also continued to invest heavily in ArenaNet. It had 12 employees when NCsoft bought it, but grew to 65 by the time it launched "Guild Wars" in 2005.

Offline, ArenaNet's success is reflected in glamorous new offices it moved into this spring in Eastgate. There's room for 450 employees to work on several floors connected by a woodsy, open lounge area filled with couches and a fireplace -- designed to be like a huge Starbucks for informal meetings and hanging out.

Was this positive outcome an anomaly?

O'Brien said he's heard about acquisitions that worked out well and those that didn't. "We've certainly heard all the horror stories," he said. "We end up hiring a lot of those people."

Global spending on video games will grow 10.4 percent to $74 billion this year and reach $112 billion by 2015, according to a new report from Gartner.

Online gaming will grow the fastest -- averaging 27 percent a year -- taking share from game software, the report said.

The research giant predicts that spending on game subscription fees will decline slightly as gamers spend more on virtual goods and services in free online games, including social games that make their money from such microtransactions.

This will no doubt be cited by analysts talking up the stock of Zynga, if it goes public as it said it would last week.

Gartner also predicts that mobile gaming will grow fast, taking 20 percent of the market share in 2015, up from 15 percent last year

But consoles will still drive the most overall sales. according to the firm's "Market Trends: Gaming Ecosystem 2011."

Console hardware and software generated more than two-thirds of the sales in the game industry last year, Gartner said.

"This large market size means that many consumers embrace gaming as a core piece of their entertainment budget and will continue to play as long as game publishers deliver compelling and fun games," research director Fabrizio Biscotti said in a release.

A mysterious new venture by Bellevue game studio Bungie - creator of the blockbuster "Halo" franchise - is being revealed today.

The name Bungie Aerospace surfaced in 2010, setting off all kinds of speculation about whether it was the company's next big game.

But fans will have to keep waiting to learn about the "big action universe" that Bungie's creating with support from Activision, the publisher it signed with after splitting from Microsoft in 2007.

It turns out that Bungie Aerospace is the name of a side venture helping smaller game studios develop and publish mobile and social games.

Bungie will lend its expertise to smaller studios and connect them to the millions of fans using its Bungie.net site. In turn, the studios will help Bungie learn more about different platforms as it continues building capabilities beyond the Xbox.

Pete Parsons, Bungie's chief operating officer, said it's a "small, focused venture" that will work with small, independent teams of mobile developers.

"It's a great opportunity for us - an opportunity to partner with some fantastic talent, help them bring their dreams to life," he said.

Parsons didn't specify the business arrangements but said Bungie will support developers, providing services such as quality assurance, usability testing and exposure "to our fan community."

Eric Osborne, Bungie community manager, said it will help studios by "launching them into orbit" with Bungie's "proprietary rocket fuel."

The first studio to sign on is Seattle-based Harebrained Schemes, a new mobile game company led by Jordan Weisman, a serial game entrepreneur who has had ties with Bungie since they were based in Chicago. Weisman later worked with Bungie at Microsoft where he was creative director of the games business.

Harebrained plans to release a mobile game called "Crimson" this summer for Google's Android platform and Apple's iOS platform.

There are numerous companies offering services and tools to mobile developers. But Weisman said Bungie Aerospace stands out, largely because of Bungie's stature.

"It fills a really interesting space," he said. "Right now the role of traditional publisher in mobile and even in social can bring debatable benefits but I think being able to team up with an uber developer with a dedicated audience brings with it a unique set of opportunites."

There's no geographic limit for the venture but it's likely that many participating studios will be in the Seattle area, where it's easiest to interact directly with Bungie and where numerous developers already have connections to the company.

Although Bungie Aerospace sounds vaguely like the name of another company in Seattle, Parsons said the main inspiration came from the team's interest in space, technology and science. The name was chosen after a group of employees returned from seeing a Space Shuttle launch, he said.

Aerospace sequences were a highlight of "Halo: Reach," Bungie's last version of the game. But Parsons denied that the name is a clue about the direction Bungie's heading with its next game.

"This is a separate effort from our next universe," he said.

Parsons wouldn't say anything about that project, but confirmed that the "vast majority" of the more than 200 employees are "super focused" on building it.

Smith & Tinker, a once high-flying Bellevue game startup, is resurfacing this week with a new Marvel superhero game for Apple's iPad, iPhone and iPod Touch.

"Marvel Kapow!" features characters such as Thor, Wolverine, Spider-Man and Captain America. Players uses touchscreen gestures such as flicks to slash enemies with Wolverine's claws or shoot them with Spidey's web.

Smith & Tinker was started in 2007 by Jordan Weisman, a former Microsoft creative director. The company raised more than $29 million from a-list backers including Paul Allen and a group of venture capitalists.

The money was mostly used to develop a line of handheld game players aimed at young boys and built around a sci-fi monster game called Nanovor that launched in 2009.

That project was dropped last year after a restructuring that eventually cut the number of employees from around 55 to under 10. A recent check found Nanovor gear for 99 cents at Amazon.com, although the game's no longer supported.

Weisman remains on the board and contributes to creative work but the company's now led by Disney veteran Joe Lawandus. The company also relocated from Bellevue to space near the downtown Seattle waterfront.

"We've had a pretty interesting ride over the past few years," Lawandus said.

Lawandus said the company still has enough cash to build at least one more game based on Marvel characters. The company last year reached a licensing deal with Disney, Marvel's owner, that enables it to build casual games based on all characters in the Marvel universe.

"We're super excited about what we think tablets can bring to the mobile gaming space," he said, adding that the company is trying to reach big audiences with the brands used in its games.

"Marvel Kapow!" is available through iTunes in free versions with seven levels and advertising, or ad-free versions with 26 levels and additional characters that cost $1.99 for iPhone and iPod or $3.99 for iPads. Later the company may develop versions for Android and perhaps Windows, he said.

Video game sales dove 14 percent in May, nearly erasing the 20 percent gain seen in April, according to NPD's latest report on U.S. game sales.

It was the worst showing since October 2006, pulled down by a slim lineup of new games, the firm said.

The research firm politely waited until after the E3 show to release the data, which would have cast a shadow over the event and changed the tenor of its press coverage.

Total sales were $743.1 million, down 14 percent from $866.8 million last year.

Game software sales were $400.1 million, down from $503.8 million in May 2010. But the report only includes physical games, hardware and accessories and not digital downloads, NPD analyst Anita Baker noted in the release.

"Keeping in mind that these sales figures represent just the new physical portion of the market for video game hardware, software, and accessories and not the growing portion of the industry that is comprised of digital format content distribution, May 2011 was the lowest month of sales for the industry since October 2006. A light slate of new releases is at the heart of this month's performance."

Baker said there were 42 new titles, but SKU, last month, compared to 58 in May 2010 and 72 in May 2009. This in turn reduced promotional activity and advertising, "which undoubtedly affected not only planned but impulse purchases."

All platforms saw declines except the Xbox 360, which was about flat - posting a 1 percent gain. The Xbox has accounted for 34 percent of physical game sales year-to-date, a share increase of 7 percent over last year, NPD said.

Microsoft said the Xbox 360 platform accounted for $265 million in retail sales in May.

Sony's PlayStation 3 and PSP also gained during the month and Nintendo's 3DS sales were "light" though NPD's expect a bump with the "Zelda" game for the 3D handheld.

LOS ANGELES -- There's another real-estate crisis happening, causing all kinds of grief for people who own multiple video-game systems.

The latest gear from Microsoft, Sony and Nintendo requires more than just a box sitting below the television.

To play their motion-sensing games, you also must mount a sensor unit on or near the TV. If you have more than one console, it gets tricky figuring out where to put all of these peripherals.

It's going to get worse. Google, Cisco, Logitech and others are pushing TV video-chat systems that require their cameras to be mounted somewhere next to your set.

So it's no wonder there was a lot of interest in an odd little gadget on display at the Electronic Entertainment Expo, in the no man's land of aftermarket game-accessory booths.

Called the TriMount, the $30 device clamps up to three different sensors onto the top of a TV set.

Torrance, Calif.-based dreamGEAR will begin selling it Aug. 15.

There's a side benefit for fans of military-action games. When the TriMount is fully loaded with an Xbox 360 Kinect, a PlayStation Eye (for its Move controller) and Nintendo Wii Sensor Bar, it makes your TV look like a radar-encrusted warship.

Its surveys found 59 percent of parents think computer and video games provide more physical activity now than they did five years ago. The ESA also found 72 percent of American households play computer or video games, the average age of players is 37, and 29 percent were older than 50.

By gender, 58 percent of gamers are male and 42 percent are female. The ESA notes young boys aren't the primary audience -- boys younger than 17 account for 13 percent of the game-playing population. Women 18 or older account for 37 percent.

The report also said 86 percent of parents are aware of the rating system that labels games with their appropriate age range.

Girls, girls, girls

The other 14 percent of parents better start paying attention to game ratings because of another trend in evidence at last week's show.

That would be misogyny, which appears to be making a huge comeback in video games. "Leisure Suit Larry" -- the pervy game character from 20 years ago -- would feel right at home.

As you approached E3, THQ's "Saints Row: The Third" was being promoted with (teeny) bikini carwashes. Inside, game developer Nival invited attendees to "get some tail" in an inflatable bouncy house with "booth babes" sporting pinned-on fox tails and wiggling their chests.

Provocative releases include "Catherine," a racy Japanese anime-style horror game coming to the Xbox 360 and PlayStation 3 this summer, and "Duke Nukem Forever," an update of the 1990s action hit with strippers, booze and guns.

Maybe studios were desperate after game sales declined last year. Or they're just being opportunistic and publishing what sells to a mostly male audience.

Yes, these games are rated "M," for mature audiences.

Force is with us, forever

Games look better and are getting cool new control systems, but their stories must keep up with the technology.

Practically every major title promoted at the show was a sequel, and the biggest were the third installments of trilogies. Microsoft's biggies included "Mass Effect 3," "Battlefield 3," "Call of Duty: Modern Warfare 3" and "Gears of War 3," plus "Forza 4" and an early peek at "Halo 4."

There were also more "Star Wars" games, including a Kinect version (below) coming out this holiday season and EA's multiplayer, online "Star Wars: The Old Republic" launching by year's end.

I love "Star Wars," and it's amazing how much creativity the movies inspired. But after dozens of "Star Wars" games over the last three decades, you've got to wonder how long it can go on. I guess it's like the burger and fries of video games -- everybody does a version, and people keep eating them up.

I left the show wondering what's going to inspire the next generation of games and whether we're just going to keep updating the golden oldies forever.

Maybe we'll move forward, now that we've figured out what to do with all those sensors stacked up by the TV.

LOS ANGELES _ Microsoft will partner with regional cable companies to bring live TV onto the Xbox, a new feature that it announced Monday at E3.

That means the TV services will be provided through cable and satellite companies, and Xbox owners will need to subscribe to their services to get the live TV onto their game console.

That's according to Mike Delman, vice president of global marketing for Microsoft's interactive entertainment business group.

During an interview in Microsoft's elaborate, two-story booth at the show, Delman also talked about Skype on the Xbox, Kinect's new capabilities and how Xbox Live is going to become an entertainment service for Windows 8 PCs.

Here's an edited transcript of our conversation.

Q: Do you feel you've got as much at E3 as the other guys?

Definitely. We don't have an announcement like a new console but the combination of the games for the hardcore, starting to answer the question about the Kinect for the core, and having a lot more Kinect for broader audiences and the live television has played real well.

Q: Some of your announcements were just a tease, like live TV coming this fall to Xbox. Did you hold back details because partnerships aren't done yet?

We have partnerships in certain places. It's kind of ironic we have a lot of international partnerships before we got some of our U.S. partnerships done. The reason we talked about it is doing the platform work - doing voice, doing Bing search, getting the UI to be a modern UI, is really the hard work. Layering in the content isn't as hard, so it's a natural sequence.

Q: The interface seems designed to plug in another tile when you get a new content partner.

Yes, bringing in the live content - a lot of people are just layering in tonnage, they're not putting interactivity and discoverability in it. Getting the interactivity and discoverability built, so the content can sit on top of it - getting the platform work done is the hard part.

Q: Will live TV be universal, or will it be regional TV services provided by whoever your cable provider is?

It will be tied to either a satellite broadcast company or a cable company. So in international markets, you'll just have one provider. In the U.S., it will be bifurcated by region, by market. You'll be a Comcast guy (in Seattle), for example.

Q: So you'll have to be a Comcast subscriber, similar to the way you need a subscription to get the ESPN content on the Xbox now?

Yes.

Q: Will the Bing search be full Web search or just for entertainment?

It will be full search on what you have on Xbox Live. So anything that's available on Xbox Live if you're a gold subscriber it will search all of that, it won't go out and search the Web.

Q: Why not add Web search as well?

Listen, when we've got tens of millions of pieces of content just on our service, being able to search that - music for example, we've got 11 million music titles now - just mastering that in a bunch of different languages is a big priority. People at this point have other ways to get out to the Web.

Q: It seems like you could point the search at Bing's entertainment channel.

It's just not in the plans.

Q: Because you are using Bing, can you also serve ads against the results?

That's not part of the plan but it can be done. A lot of it will probably be serving ads within the content more than within search.

Q: It seems to be mostly about utility, making search easier than pecking out letters on the screen.

People will be doing stuff with their voice in probably a quarter the time it takes to go through the menu with the controller.

Q: With hardcore games, Kinect is still doing auxiliary things mostly, rather than controlling the main action. When are we going to see that?

People need time to build a core, triple a title from the ground up with Kinect. People are starting to build core games from the ground up. The core doesn't want the controller to come out of their hand, necessarily. ..In a way I think voice (with a controller in hand) will be as powerful or more powerful to the core than will gestures, and the gestures won't be the sweeping gestures you have in the broader Kinect. I think they'll be more pointed gestures like a head-fake or a head-butt. ... People are being very smart about doing something that will enhance the core experience rather than totally change it.

Q: So will "Halo 4" be a Kinect game?

I'm sure we'll have some Kinect in it but we're not that far along.

Q: We've seen voice and gesture controls but not much use of Kinect's scanning capability.

Q: I also wondered if scanning or the finger tracking you've shown here would need new hardware with better sensors.

No, you can actually do that stuff now. Some of the things that will be interesting in the next generation of sensor will maybe a more high-definition RGB camera so the video conferencing is better than it is now. Skype, if it comes to fruition - you can see a lot of possibilities.

Q: I was surprised we didn't hear about Skype in your E3 press conference, but I guess the deal hasn't closed yet ...

I'm probably out of bounds talking about it.

Q: Maybe you'll announce Skype on Xbox at CES in January?

Whenever it clears, there's a lot of possibility with that.

Q: Because there's a new Nintendo console that runs hardcore games coming, will people hold off buying an Xbox or adding Kinect to their console?

I don't know what the reaction's going to be relative to their own platform. All I know is we're in the fifth to sixth year of our platform and platforms have never grown in the fifth or sixth year at what we're seeing. Other platforms is not what we're focused on, we're focused on how do we make Kinect, how do we make Live as compelling as possible. In a way a lot of what's going to happen is the box doesn't become the focus going forward, it's what is the sensor, what is the handheld, what is the phone companion, what is the service companion and what are the experiences.

Q: Speaking of phone, I was surprised we didn't hear about connections between Xbox and Windows Phone here at E3.

Live has been successful on the Windows Phone, Live will be built into the PC; it will be the service where you get your entertainment. We were talking about it - you will not just see consoles and handhelds at this show next year, this show's going to morph into other devices.

Q: Will Xbox offer games on certified phones, similar to what Sony's PlayStation is doing with Android phones?

We think there's a lot of potential on the Windows phones. With the Nokia relationship, we're going to have a lot more distribution of phones and Live will be the primary entertainment service. I think that's going to be a good play for us. If we have that and the PCs to leverage, that will be a big Live base. It's our job to make 'buy a movie in one place and play it everywhere, buy a game in one place and play it everywhere.' Making things portable through the devices will be a big focus of ours.

Q: Will Microsoft's Zune service continue building up its video and music stores, or will you be working more with partners running content stores?

We're very committed to offering music and video and TV shows on our own service through Zune.

Q: I don't think I heard the "Z" word in the keynote. Are you phasing out the Zune brand?

In general I think what you're going to see is us talking about 'music' and 'video.' I think what we're coming to the realization about is putting brands on top of brands on top of brands is not as, you know - if you want to look for music, just knowing it's under a category (music) is a good thing.

Q: Speaking of branding, Xbox brands are all over Qwest Field. Are you going to go the next step and name the whole stadium, taking that over from CenturyLink?

Not that I know of. I'm a little worried we might own the whole city of Seattle if we keep doing sponsorships with everybody.

Q: How will your services and content be part of Windows 8?

There will be a lot of similarities in design and service philosophy. Whether it's us or Apple or anybody else, people want to be able to navigate through multiple devices in a certain ecosystem very seamlessly so we're committed to that.

Q: Will Xbox Live be your cloud media service that works with your Windows PC as well as your phone and Xbox?

Xbox Live will the pervasive media service across devices.

Q: Right now it's a little confusing - you've got Xbox Live, SkyDrive storage and other online places for media.

We have a ton of assets. Unifying the assets will be good for us and good for consumers.

More than a month after a security breach, Sony today said it will have its PlayStation Network "fully" restored by the end of this week.

That's just in time for E3 game conference events, which begin Monday.

But "fully restored" is an overstatement. The company said the network will be completely back in the Americas, Europe and Asia "excluding Japan, Hong Kong and South Korea."

From its release this morning:

"Details for Japan, Hong Kong, and South Korea as well as the remaining services on Qriocity will be announced as they become available."

The company also said it's still working to restore the network's online video service and some elements of its Qriocity music service. The "unlimited" Qriocity service will be back for PlayStations and PCs is back, but not other Web-connected Sony gear.

Seamus Blackley, another one of the original four Xbox founders, is starting a new game development company in Los Angeles.

Blackley has been leading the games division of Creative Artists Agency, where he's been since 2003.

Variety broke the story Thursday that he's leaving to start his own company, and Blackely confirmed the move in an email last night.

Blackley's hiring at CAA "breathed considerable life into the 3-year-old division." From its report:

Since then, he's helped lock down lucrative deals for clients, including a groundbreaking pact for Shinji Mikami and Goichi Suda to independently finance games such as their upcoming "Shadows of the Damned" that resembles how indie films are funded. He also led the deal for "Rock Band"-developer Harmonix Music Systems' sale to Viacom.

Blackley left Microsoft in 2002 and co-founded a game financing venture called Capital Entertainment in Seattle before joining CAA.

Here's a clip of an interview with Blackley done five years ago for ACM, the Association for Computing Machinery:

Bellevue game studio Her Interactive has a new chief executive, and it's a him.

The company today announced that industry veteran Stuart Moulder was hired as chief executive, taking over for Megan Gaiser.

Gaiser will continue to lead creative direction and business development as chief strategic and creative officer.

"As we have grown Her Interactive from a dedicated PC game developer to additional platforms, we recognized the need to expand our leadership structure to better leverage Her Interactive's native capabilities while successfully navigating the complexity of new initiatives," Gaiser said in a release.

Moulder earlier worked at Sierra On-Line and Microsoft, on franchises such as "Age of Empires," "Halo" and "Flight Simulator." Most recently he was senior vice president of development at Gazillion Entertainment, working on "Lego Universe" and "Marvel Super Hero Squad Online."

Her Interactive has been on a roll lately, extending its Nancy Drew mystery game franchise to Apple's iOS platform in February.

More than 9 million copies of its Nancy Drew games have been sold, mostly on the PC platform. The latest version, "Nancy Drew: Captive Curse" for the PC and Mac, is coming out June 28.

Social gaming giant Zynga, which recently opened a Seattle office, is going to file for its initial stock offering this week or next, according to a report by Kara Swisher at All Things D.

The San Francisco-based company was expected to go public, perhaps in 2012.

Zynga's move will be closely watched in Seattle, home to several large and successful private game companies. One of them, PopCap Games, is gearing up for an IPO later this year. I wonder if that will be pushed back by Zynga's early filing.

Zynga founder Mark Pincus didn't say much about stock plans when he spoke at the Seattle office opening in April, but maybe there will be something to disclose next week when he's appearing at Swisher's All Things D conference in California.

The gifts are on top of the 12 months of an identiity theft protection service that Sony is offering to some 77 million users affected by its compromised network. It remains to be seen whether the gifts are enough to restore faith in the network and avert class-action lawsuits.

Users in North America are being offered two free games from a list of five older titles, including "inFamous" from Bellevue's Sucker Punch Productions. The games will be available once the system is fully restored, and users will have 30 days to download their choices.

Sony is also offering PSP portable owners two free games from a list of four: "Little Big Planet," "ModNation Racers," "Pursuit Force" and "Killzone Liberation."

Sony is also giving network users access to a selection of free movies over one weekend. The titles and timing will be announced later.

Network users will also get 30 days of free access to the premium "Plus" service and Plus subscribers will get 60 days of free subscription.

Users of Sony's "Music Unlimited Premium Trial" subscription service will get an additional 30 days of free premium service, and subscribers to the premium and basic services will get a free 30 days of service plus time lost during the outage.

Sony's also giving away 100 free virtual items to use in its PlayStation Home virtual realm. New free content will be added soon, hopefully including padlocks.

Holiday sales contributed to a big rebound in video game sales during April, according to NPD's closely watched sales report.

Sales of physical video games, hardware and accessories rose 20 percent in the month, to $961.2 million in the U.S., reversing a downward trend earlier in the year.

Maybe the bunny also likes to play Valve's "Portal 2." It went on sale April 19, but was still the month's second-best selling game, after "Mortal Kombat 2011." Altogether sales of game disks rose 26 percent, to $503.2 million. It was the first time since November that sales of games software rose by dollars and unit volume, NPD said in its release.

"Easter purchasing occurred in April this year as opposed to March last year," NPD analyst Anita Frazier said in arelease. "The Easter timing shift could explain about $60 million of the growth, but even accounting for that shift, sales of new physical product realized a notable increase vs. last year."

Sales of game hardware rose 3 percent by unit, but people bought more expensive gear, so total sales were up 12 percent. That's probably because people were buying Xbox 360 bundles with Kinect and PlayStation 3 units, and fewer Nintendo Wiis, as rumors were circulating in April that a price cut and replacement model were coming.

Of the different platforms, the Xbox 360 generated the most physical game sales, with 3.5 million Xbox titles sold during the month.

Microsoft provided more details, noting that it sold 297,000 Xbox consoles in April, when sales were up 60 percent over the previous year. It said Kinect is driving momentum, and the company will triple the lineup of Kinect games by the end of the year. So far "Kinect Sports" has sold more than 3 million copies and "Dance Central" has sold more than 2.5 million.

Xbox spokesman David Dennis said Kinect sales still have momentum from the holidays. Sales are also continuing as people try the system at friends' homes and then buy one for themselves, he said.

Sony's statement noted that PS3 sales are up 13 percent and sales of games for the console rose 40 percent.

The top-selling accessory was the Xbox 1600 point game card, and the top new accessory was Sony's "Socom 4: Full Deployment Bundle" for the PS3, which includes a Move controller and Sharpshooter rifle frame plus the Socom game from Redmond's Zipper Interactive.

NPD noted that "Socom 4" would have made the top 10 games list if sales of the Deployment bundle were counted with game software sales.

A news release from Boeing today sounds like it came from a video game.

The company said it received a $4.2 million contract to develop a 25-kilowatt "high-brightness" laser as part of a larger Pentagon effort to build a high-power, solid-state energy weapon.

A Boeing team in Albuquerque will tweak off-the-shelf, industrial lasers used for cutting and welding. The 16-month "thin disc laser" or TDL project "could lead to the development and production of operational versions of the laser system."

From the release:

"A high-power, solid-state directed energy weapon has the ability to damage, disable or destroy targets at the speed of light, with little to no collateral damage. The laser also can flexibly support missions on the battlefield as well as in urban operations."

Spreadsheets and word processors persuaded people to buy early PCs. Messaging and mobile browsers did the same thing for smartphones.

If you haven't bought an iPad or tablet computing device yet, maybe it's because you're not yet hooked on "Angry Birds."

The addictive slingshot game is the killer app for these touch-screen gadgets filling the gap between smartphones and portable computers.

People buy tablets thinking they'll use them instead of computers, but most don't. They end up playing "Angry Birds."

Last week a Nielsen survey said most tablet owners are using their PCs as much or more than they did before buying their tablet. Earlier, the firm said games are the most downloaded mobile application, and the best-selling app, is "Angry Birds."

The game, made by a small Finnish company called Rovio, has been downloaded more than 140 million times, and at least 40 million people per month are playing. They're collectively spending more than 200 million minutes per day tapping and flinging birds across the screen, trying to knock down a series of structures built by obnoxious pigs.

"Angry Birds" was originally designed for the iPhone in 2009, but it's best on a tablet, where you can see more of it and have more room to control the aiming.

"It's certainly the most dominant game on tablets. There's nothing close to it, I believe," said Rich Wong at Accel Partners, a Silicon Valley venture firm that backed Facebook and invested in Rovio in March.

It makes you wonder if Microsoft hooked up with the right Finnish company to resuscitate its mobile business. Maybe it thought Nokia was behind the birds.

After handling more tablets than an Egyptian librarian, I've come up with a shopping guide, for those willing to spend $250 to $800 for the best "Angry Birds" experience.

Motorola Xoom, $599-$800

"Angry Birds" is prominently featured on the Xoom packaging, and the game works well on the device.

The Xoom's 10-inch screen is a good size for displaying both the launch area and target structure, even on upper levels with passages, outbuildings and stashed explosives on the far right side of the screen.

Although it's the first Android tablet with a dual-core processor, there wasn't a noticeable difference in loading. Nor did it reduce the wait time between levels.

On a bus, the Xoom's considerable heft steadies the device enough to play on bumpy roads.

The Xoom did cause one embarrassing birds incident.

During a discreet session Friday, before my deadline, the app abruptly froze. When I restarted it, it launched with the mute button off. There was no warning of this changed setting, and I was busted by the loud theme music.

Frantically tapping the screen and pressing the power button didn't stop the telltale flute. It took forever to power off, and paused to ask "are you sure?" before it stopped.

Otherwise, the Xoom scored well in the "quick exit" test. I could close the game and pretend to be working with a single click.

Barnes & Noble Nook Color, $249

After updating the Nook's operating system, you can download the original version of "Angry Birds."

The Nook market offers only the original "Angry Birds," for $2.99. Later versions and the free, ad-supported ones aren't available yet.

The Nook is the most economical option for tablet birding and doubles as a browser and electronic book with a 7-inch touch screen.

It also fits in a large pocket and weighs just less than a pound. However, this portability made it difficult to hold the device steady on the bus, where I experienced a number of misfires and errant shots.

Resolution on the Nook didn't seem as crisp as on higher-end tablets. I could see jagged edges on the blades of grass.

The Nook fared the worst in the "quick exit" test, requiring six clicks to exit in the middle of a game.

Apple iPad 2, $499-$829.

The iPad's big, bright screen is terrific for "Angry Birds" and provides plenty of room to aim.

Action is crisp and Rovio seems to put extra sparkle into the iPad version, highlighting edges of structures, for instance.

Both free and paid versions are available from iTunes, where the latest version of the game is the best-selling paid app. Two earlier versions are in the top 10.

There are a few niggles, though. The iPad version takes it upon itself to adjust the horizontal scroll mid-game, which gets annoying.

Also, every time you start a game, the iPad suggests creating or signing in to an account with Apple's "Game Center" service. There isn't an obvious way to disable this nagware, so you have to hit "cancel" every time. Then you get a message saying that "Game Center" is disabled, and you have to hit "OK" to start playing. This reminds me of Windows Vista.

It takes one click on the iPad to exit a game, return to the home screen and appear to be working.

BlackBerry PlayBook, $500 to $700

The PlayBook is a pocketable, 7-inch touch-screen device that's widely available. But "Angry Birds" is not yet available on the BlackBerry market. An emulator that will run Andoid apps is being developed.

T-Mobile G-Slate, $530.

The G-Slate has an unusual 9-inch widescreen display format that's particularly well suited for "Angry Birds."

However, the screen also partly cuts off the information displayed on the Android Market, including the "more" button listing additional version of "Angry Birds" available from the store.

Like the Xoom, the G-Slate is based on Google's new Android 3.0 software.

Currently, only free versions of "Angry Birds" are available for Android but paid versions are expected later this year.

Loading the game via T-Mobile's 4G network was significantly faster than it was on the Xoom over Verizon Wireless' 3G network, but the Xoom should be upgradeable to 4G before new "Birds" are released.

It takes a single click to exit a game and return to the home screen of the G-Slate.

Dell Streak 7, $200-$450.

The Streak has a 7-inch screen that's just a hair smaller than the Nook, but overall the device is smaller and fits easier in a pocket for portable play.

It's more like a computer than a Nook, and both its launch area and target can be displayed at a reasonable size. That makes the game more enjoyable than on a smartphone with a 3-inch or 4-inch screen.

However, the Streak resolution isn't as crisp as the larger tablets and the device would re-size the game between levels, requiring a tedious extra pinch to get the game properly aligned in the screen.

The re-sizing isn't a game-breaker, but these little design decisions lead to wasted time that adds up fast.

Seriously, how do they expect us to get any work done with these things?

Sony's not saying yet whether the company's seen a boost in sales of "SOCOM 4: U.S. Navy SEALs" after Sunday's action in Pakistan.

But I'll bet the game - released on April 19 - gets a boost from newfound appreciation for the Navy commandos.

SOCOM 4 was created by Zipper Interactive, a Sony-owned studio in Redmond led by people who previously worked on military simulation programs. Zipper consulted with SEALs as it developed the franchise to make it more realistic.

The game, for the PlayStation 3, follows a SEAL team on a dangerous mission in Southeast Asia. It's an intense, hyper releastic action game in which players control a squad working through foreign terrain. It can also be played with the PS3 motion-tracking controllers, which can be mounted in an accessory rifle frame.

Asked if sales jumped after Sunday's SEAL assault on Osama Bin Laden's compound in Pakistan, Zipper President Brian Soderberg referred me to a Sony spokeswoman, who said the company is still working on extracting sales data for the game.

The company today announced the acquisition of ZipZapPlay, a San Francisco studio known for its Facebook games.

ZipZap will remain in San Francisco, led by founders Curt Bererton and Mathilde Pignol. It has 17 employees who produced games such as "Baking Life."

Terms of the deal weren't disclosed.

"Adding ZipZapPlay's strong design and development team to our rapidly-growing social games group is a big move for us," PopCap co-founder and chief creative officer, Jason Kapalka, said in the release. "ZipZapPlay is a great cultural fit: a truly creative company that lives and breathes in this space. And their next game is very innovative and exciting - we believe it has the potential to be a step forward in the evolution of social gaming."

PopCap plans to have four or five games available on Facebook by the end of 2011, it said in the release. Its first social games, "Bejeweled Blitz" and "Zuma Blitz," draw about 5 million daily active users. PopCap said this makes it the third-largest Facebook game developer after Zynga and Electronic Arts.

This is PopCap's first acquisition since 2007, when it bought Vancouver, B.C.-based SpinTop Games and Chicago-based Retro64.

In this apt picture provided by PopCap, ZipZap's Bererton is being gobbled up by a dragon couch at his office in San Francisco:

The line was out the door Tuesday night at the new Seattle office of Zynga, the red hot San Francisco social games company.

About 175 engineers and game developers crammed into the space in the Washington Shoe Building in Pioneer Square.

Zynga called it a launch party, but it was really a recruiting event, the latest in a series of meet-and-greets hosted by California companies tapping into Seattle's deep reservoir of tech talent. Similar events were held earlier this year by Salesforce.com and Facebook, while Google, Amazon.com and Seattle startups have been talking up their hiring plans.

Tuesday's highlight was an appearance by Zynga founder Mark Pincus, who gave a quick speech and worked the room, shaking hands and getting his picture taken with fans.

Zynga has had amazing growth. Started in 2007, it now has around 250 million players for its games such as "FarmVille" and "CityVille." They're mostly played on Facebook, generating a staggering amount of information about players' activity that Zynga needs help sifting and analyzing.

Pincus, 45, told the crowd - including engineers from Cray, Amazon.com and RealNetworks - that Zynga is tracking 8 billion "neighbor connections" among between users, who generate 5 terabytes of click data per day, up 500 percent from the fall.

Managing this flood is a challenge but "what's more interesting is what you do with it," he said.

Also interesting to the audience is the chance to join Zynga before it goes public. Last month it was reportedly valued at $10 billion by investors and positioned for an IPO in 2012. It has raised more than $360 million and has nearly 2,000 employees.

In Seattle, Zynga set up enough room for 54 employees people initially. So far 10 seats are filled, mostly with early Amazon.com employees like Neil Roseman, who was hired last month as the vice president in charge of the office.

During an interview at the event, Pincus talked about Zynga's relationship with Facebook, its future and what he's looking for in Seattle. Here are edited excerpts:

Q: Why are you so interested in there so many Amazon.com employees here?

A: We are definitely not targeting Amazon or any other company.

It seems like there's a lot of affinity between the cultures of our companies. I have huge respect for Jeff Bezos and the way he builds his company - the idea that he took a simple concept like shopping and made it so much better, and created a vision that makes as much sense now as it did 10 years ago, and you know it will make as much sense in 10 years.

The way that company has built out, it's very technology-centric. It's about APIs and Web services. Really they were way ahead of their time in approaching e-commerce not as a compilation of Web pages, but as something with a much more powerful backend.
That's very similar to the approach that were taking to gaming. We want to have this very powerful backend that we've invested massively in, this real-time data store that may be the biggest in the game industry. I'm sure it's the biggest by the sheer quantity of data, and a culture inside the company that's very decentralized - everything is kind of an API service inside the company.

Q: Is your respect for Amazon why you're in Seattle?

A: No, we've been interested in Seattle for a long, long time. It really was more coincidental that Amazon's here and that we happen to have a bunch of former Amazon people.

It's more likely that the Microsoft influence on Seattle will impact us than Amazon in the sense that we're excited about the level of real hard-core engineering. When I think of the engineering horsepower here, I think in many ways it can be deeper than the Bay Area.

Q: The opening comments by you and Neil suggest Zynga is building a new foundation of services. Is that for running Zynga post-Facebook?

A: There are a couple of focuses where this talent pool will be really key for us. One is broadly in network products - consumer facing products that have value across all of our games - like Zynga message center, which is used by more than half of our players every day as a way to interact and be social with their friends. There's a whole layer that we're excited about, surfacing more social opportunities in any Zynga game.

Q: Independent of the platform?

A: Independent of the platform. That's one area of network products. Another area is game development. If we can find and recruit world-class game entrepreneurs from up here - they exist up here but we don't have them - we would love to build games here.
The third area is on mobile platforms -- going deeper on new technologies whether around HTML, whether it's rendering tools, development tools.

Q: Zynga has figured out ways to keep players around, offering them fresh content. That seems to make you voracious, acquiring talent so you keep getting new ideas.

A: Yeah, because we approach games as a service, it's more like a TV show - it's more like "Lost" or "Seinfeld." The users of those games have a voracious appetite for new content. The games are all about engagement - these are really some of the deepest engagement on the Internet.

If you think about your options to spend time on the Internet, you can look at a bunch of links and text pages or interact in a deeply rich, interactive environment like a game with your friends. Chances are the game is going to be a more compelling experience while you're engaged in it.

But in our kinds of games, as you go up the ladder, there's this always increasing appetite for new content - quests, in Farmville - decorations, new features. We're always trying to innovate around creating new ways for you to interact with your friends. Farmville just launched Farmville England. In Farmville England we came out with things like animal breeding, new kinds of buildings that matter. Cityville has every week or every other week, they just came out with new version of franchises, which is incredibly social.

Q: You also do a lot acquistions, to keep the machine going ...

A: Yeah, the acquisitions have been about bringing in new DNA. We like teams that have worked together for a long time. We love teams that have already brought products to market and have that battle hardened sense of what it takes really to get something out the door and take it to scale.

Q: Had you considered buying a Seattle company to get started here?

A: We've been interested in Seattle for a long time. It's surprising when you think that we're in 13 locations it's taken us this long to come to Seattle.

Q: What do you think about Seattle's Big Fish Games and PopCap?

A: I think they're great companies that are in slightly different businesses than we are. I have huge respect for both of them -- and I play and have been addicted to a bunch of PopCap's games.

Q: Where will you be in two years?

A: I hope that we have made many, many tens of millions of more people into daily social gamers. I hope that we've made "play" as big a verb on the Internet as "search" or "shop" or "share."

Q: What will happen to console networks like Xbox Live and PlayStation Network?

A: I probably have a counterintuitive or contrarian view on that. I actually think you're going to see a surprising upsurge in their business. I think that social gaming is teaching a lot more people about how fun games are and I think there will be people who graduate upwards. I think you'll see the two come closer together in the sense the console games probably will see the value in going more where the Nintendo Wii went or most recently Microsoft Kinect. I think you'll see them see the value in going more casual. It's kind of like movies versus TV - they'll always be in a position to deliver a much higher value, deeper, engaged experience than the web can.

Q: You're following Amazon, Google, Facebook, Salesforce.com and others that recently had big recruiting pushes and events in Seattle.

A: Is it inappropriate to ask if their CEO's came?

Q: No - they didn't.

A: So we're hungrier for Seattle talent.

Q: Is Seattle talent's hungrier for you, because Zynga is in position to go public?

A: I don't know about that but I hope that people wouldn't join us because they were hoping we'd go public. We want people to join us because they're excited about this mission. I think there's probably a great financial opportunity at all of these companies. I'm hopeful people are excited about games and they're excited about the kinds of products we want to build and the ways we want to innovate and they're excited about the kind of data that we're digging into and the kind of problems we're trying to solve. It's a very different environment and experience at our company than any of those companies, public or private.

Ours is more small teams that are more like startups that have their own missions and they're off doing them.

Q: Where will this office be in a few years?

A: I just don't know. If we're able to attract the game talent as well as engineering talent here, then Seattle could be one of our biggest if not second biggest location. It depends on how big social games gets and how big we get with it, but the remote studio model has been very successful for us.

Q: Your Facebook partnership expires in what, 2014 or 2015?

A: Gosh, we don't even think about that. I think the way that Mark [Zuckerberg] and I think about that is both of us hope that that is a partnership that lasts decades.

Q: I keep hearing that a huge amount of money generated on Facebook is by Zynga.

A: Neither company talks about it, but it's definitely a very important business relationship for both.

Q: How will your mix of global vs. U.S. players evolve? (Now 75 percent are outside of the U.S.)

A: I would assume it will eventually look more and more like the Internet. Our view in the future is there will be something like 4 billion devices connected to each other through a combination of the Internet and social networks on top of that, and that half of those people will engage in games.

Q: How many will be Zynga games?

A: Of course I hope the lion's share. We hope that we can be the Google or the Amazon -- what they are to their verbs, we want to be to "play."

Q: Who are your biggest competitors?

A: We don't think about it. We don't spend our time thinking about beating competition. For Google to build out search or Amazon to build out shop, they had to take it direct to the consumers and convince them this had value in their daily lives. So it's a much harder mission than just trying to take out a competitor or beat somebody else.
We have to innovate and prove to you that we're worthy of 15 minutes of your day every day, and we're a better way for you to play and relax and connect. It's probably like you're going to do that instead of TV or a conference call at work - or during a conference call.

I know in traditional media it's "what are you taking away from." Social gaming to me feels additive: I think people have these nooks and crannies of time that we haven't every been able to fill as a society before, and these mobile devices are starting to let us do that. We all want to multitask a little bit - we're really designing our games to fit in those nooks and crannies.

It's funny, we don't want them to be too engaging - they shouldn't compete for your attention too much. They should be just nice, in the background.

Sony Online Entertainment is closing its Bellevue game studio and two others and laying off 205 employees.

The company also said that it's killing "The Agency," a massively multiplayer online spy game for the PC and PlayStation 3 that was being developed in Bellevue.

Sony hired several former Microsoft game developers to start the studio in 2004. The next year they began work on "The Agency" (pictured).

Sony spent millions on the game and at one point employed more than 100 developers at the Bellevue studio, which hosted high-profile media events to drum up interest in the game a few years ago. But the game's release was repeatedly delayed, key leaders of the studio left and Sony hasn't said much at all about the game recently.

A spokeswoman wouldn't say how many employees are left in Bellevue. The company's also closing studios in Tuscon and Denver and transferring their projects to SOE's San Diego headquarters. Altogether it's laying off 205 employees across the three studios.

A Sony statement said the company's closing the studios and killing the game so it can focus on its "PlanetSide" and "EverQuest" franchises "while also maintaining its current portfolio of online games."

"All possible steps are being taken to ensure team members affected by the transition are treated with appropriate concern," it said.

Sony continues to operate Zipper Interactive, a Redmond studio that's about to release a new version of its "Socom" action game for the PS3. The company also has close ties to Sucker Punch Productions, a Bellevue studio that created the PS3-exclusive "inFamous" franchise.

The Bellevue studio that's closing occupied around 15,000 square feet in an office park alongside Highway 520 near the site of the original Dixie's BBQ.

Nintendo's new 3DS game player is hands-down the coolest new toy in the world for kids 13 and under, and those who just love electronic toys.

It's more fun than a barrel of smartphones.

It's too expensive and some may think it's gimmicky, but the 3DS will give Nintendo bragging rights again, until it comes out with a new version of the Wii console.

The 3DS goes on sale for a dizzying $250 on Sunday, a month after its blockbuster release in Japan.

Not many kids will be able to afford one until the price comes down. It costs more than an Xbox or a Wii.

But eventually the 3DS will end up in the hands of millions, and it may change the way they think about video games.

From the outside, the 3DS looks a lot like the DS handheld game players that Nintendo has been making for years. It's a solid, half-pound, 3-inch by 5-inch slab available in black or blue.

What's new is a system of cameras, lenses and software that display games and video in 3-D without requiring special glasses. The 3-D displays on a 3.5-inch diagonal screen. There's also a second, 3-inch touch screen.

It's more than just another 3-D video player being pushed onto mostly indifferent consumers, though. Instead of using 3-D mostly for gratuitous special effects, Nintendo designers used the technology to create exuberant, mind-bending games that blend the real and virtual worlds in unexpected ways, creating a new kind of fun.

Consider "Face Raiders," one of the preloaded games. Players take a picture of themselves, a family member or a friend with the 3DS, and the face becomes an animated ball, bouncing around the screen, making faces and sticking out its tongue.

The animated head is actually bouncing around the room beyond the device. The game's landscape is a live image taken by the camera on the back of the 3DS. Peering into the screen is like looking through a magic window into an alternative version of the room you're in, which becomes a place where wild things are happening.

You fire yellow balls at the head -- or heads, after they multiply -- before they crash through the walls around you, leaving jagged holes.

Imagine how cathartic and subversive this can be for a kid. They'll appear to be sitting quietly on the couch, but from their perspective, they're smashing apart a room they were just forced to clean, lobbing balls at the cackling, digitized version of their little sister bouncing off the walls and ceiling.

This made me wonder about the enthusiasm that Japanese electronics companies have for 3-D technology. Perhaps the illusion of depth and extra space created by 3-D technology is appealing to people living in small homes in densely populated cities. It will also appeal to kids stuck in their rooms or crammed into the back seats of cars and minivans in the U.S.

Still, software and content are key, and it remains to be seen how many game developers will have as much success with the 3DS platform as Nintendo.

The 3-D effect can seem a little cheesy at times, reminiscent of its distant ancestor, the "animated" Cracker Jack prizes that appear to move when you look at them from different angles.

A 3DS version of Electronic Arts' "Madden NFL Football" was more fun with the 3D turned off, I thought, but maybe it was because I kept seeing double images of things like the field goals.

On all the games, the 3-D effect is sensitive to viewing angle and you have to hold the device about 10 inches from the face and straight on to get it right.

Action in "Lego Star Wars III: The Clone Wars" was dramatically better with the 3-D effect. Bridges extended across chasms, laser blasts zoomed by at different angles and there is, of course, the opening story that recedes into space.

If you were one of the kids who beelined to the periscope at Seattle's Museum of History & Industry, you'll love "Steel Diver," a great submarine game for the 3DS. One option has you peer through a scope, searching for ships hidden by waves in the foreground. When they get close, you see the 3-D depth charges sail toward your sub.

One of the best titles is included with the 3DS. Called "AR Games," it works with a set of "augmented reality" playing cards.

You place one on a flat surface and position the 3DS about 14 inches above the card. Then strange things happen in the room when you look through the 3DS lens.

Seen through the screen, the cards bulge until a box bursts upward. After you fire a few arrows at targets around the box -- calibrating the alignment -- an angry dragon may emerge for you to fight with more arrows.

Another box contains a billiard game in which my coffee table undulated and melted from a lava flow.

But a Mario AR card failed to launch its game, even after I followed the tips and made sure there was plenty of light in the room.

This reminded me of the occasional challenge with Microsoft's Kinect motion sensor for the Xbox 360, which also uses depth-sensing cameras that can be thrown off by a room's lighting.

These cards are an opportunity for Nintendo to sell cheap upgrade packs, like Pokémon cards, but the company didn't provide details of its future plans for them.

To stream movies

The 3DS is also intended to be more of a multimedia device, putting it in better stead against the phones and tablet computers that are pushing into the market for handheld gaming.

Starting this summer, Netflix subscribers can stream movies to the 3DS. Nintendo's also going to operate a short-form video service to distribute 3-D movie trailers, music videos and comedy shorts to the device.

A Web browser will be added, and 3DS owners will get free Wi-Fi access on AT&T hot spots.

The 3DS also can be used to connect and play with nearby 3DS units, if parents haven't locked the device down with its parental control system.

There's also a pedometer that tracks steps when the device is closed but powered on.

You would think the pedometer data would sync to the hugely popular Wii Fit game, but it doesn't.

This is one of several opportunities that Nintendo missed to have the 3DS work wirelessly with the Wii. Nor can you transfer "Mii" avatars that you've already created on the Wii onto the 3DS.

Perhaps Nintendo is holding those features back for the next version of the Wii, which some have speculated could be announced this summer.

It presumably will have 3-D capabilities, giving game developers another platform for the experience they're getting with the 3DS, and Nintendo another outlet for its upcoming 3-D entertainment channel.

Nintendo said production hasn't been significantly affected by the disaster in Japan. The tragedy puts the importance of games and gadgets in perspective but perhaps there's no better time for a Japanese company to show that it can see fun in the future.

Here's a picture I took at last June's E3 game conference of the line to see the 3DS, which was unveiled at the event:

Characteristic Features:
- 3D screen, enabling 3D view without the need for special glasses and the ability to adjust or turn off 3D effect with the 3D Depth Slider.
- Stereo cameras that enable users to take 3D photos that can be viewed instantly on the 3D screen.
- New input interfaces including the Circle Pad, motion sensor, gyro sensor
- SpotPass, a feature that lets Nintendo 3DS detect wireless hotspots or wireless LAN access points and obtain information, game data, free software, videos and so on for players even when the system is in sleep mode.*
- StreetPass, a feature that lets Nintendo 3DS exchange data automatically with other
Nintendo 3DS systems within range, even in sleep mode once this feature is activated by
the user. Data for multiple games can be exchanged simultaneously.
- Features that users can access without stopping game play such as the HOME menu, Internet Brower, Notifications, etc.
- Built-in software such as the Nintendo 3DS Camera, Nintendo 3DS Sound, Mii
Maker, StreetPass, Mii Plaza, AR Games, Activity Log, Face Raiders, etc.
Nintendo eShop where users can view trailers, software rankings and purchase software.
- System Transfer which enable users to transfer already purchased software from one
Nintendo 3DS system to another. DSiWare purchased for the Nintendo DSi or the Nintendo DSi XL can also be transferred into a Nintendo 3DS system.**
- Compatibility functions where both new software designed for Nintendo 3DS and most
software for the Nintendo DS family of systems can be played.
- Parental Controls which enable parents to restrict game content by ratings as well as use of specific wireless connectivity, 3D functionality, etc.***
*Some of these features may not be available at launch
**There is a limit to how many times transfers can be made. Some software may not be transferred.
***Additional features added through system updates may also be subject to Parental Controls.
Some of these features such as the Internet browser, Nintendo eShop, system transfer and the ability to download software and videos using SpotPass will be available after system updates are performed.

Cameras: One inner camera and two outer cameras. Resolutions are 640 x 480 for each camera. Lens are single focus and uses the CMOS capture element. The active pixel count is approximately 300,000 pixels.

Wireless Communication: 2.4 GHz. Enabling local wireless communication among multiple Nintendo 3DS systems for game play and StreetPass. Enabling access to the Internet through wireless LAN access points (supports IEEE802.11 b/g with the WPA™/WPA2™ security feature). Recommended distance of wireless communication is within 98.4 feet. This can be shorter depending on the enviromental
situation. WPA and WPA2 are marks of the Wi-Fi Alliance.

Other Input Controls: Other input controls are the following:
- 3D Depth Slider (enabling smooth adjustment of the 3D level effect)
- HOME Button (brings up the HOME menu)
- Wireless switch (can disable wireless functionality even during game play)
- POWER button

Battery Duration: When playing Nintendo 3DS software about 3-5 hours. When playing Nintendo DS software about 5-8 hours. Battery duration differs depending on the brightness setting of the screen. The information regarding battery duration is a rough standard. It can be shorter depending on what functions of the Nintendo 3DS system are used.

Game Card: Nintendo 3DS Game Card. The size is approximately the same as Nintendo DS Game Card.

The company sold 535,000 systems in February in the U.S. Microsoft said it was the best non-holiday month (meaning other than October, November or December) ever for the Xbox.

This beat even the crazy month in September 2007, when "Halo 3" was launched, NPD noted in its monthly report on U.S. game sales. This follows yesterday's disclosure that 10 million Kinects were sold since its November launch.

February seems like an odd month for a surge of Xbox sales. Group Manager David Dennis said there was pent-up demand after supplies ran low in December and January, and there was also a "viral effect" as people tried systems that others received in the holidays.

"As we kind of replenished stock back in February, people were still interestd in Kinect," he said.

A big seller last month was the 250 gigabyte Xbox system bundled a Kinect sensor (for $400), but Sony's PlayStation 3 and Nintendo's Wii also saw sales grow during the month, NPD said.

Altogether physical sales of video game products grew 4 percent during the month, to $1.33 billion.

The console business was up 12 percent, while the portable game player business fell 27 percent (perhaps because buyers are waiting for the Nintendo 3DS).

Hardware sales were up 10 percent, to $426.4 million, and accessories were up 22 percent to 210 million. Game sales - which doesn't include downloads - fell 8 percent.

"Call of Duty: Black Ops" continued to lead game sales, becoming the best-selling game in history, a spot previously held by Wii Play.

Total retail spending on the Xbox platform -- including hardware, software and accessories -- was $475 million in the month.

Nintendo issued a releasing saying that it sold 454,000 Wii consoles in February, pushing the total to more than 35 million sold in the U.S. since its launch.

SAN FRANCISCO -- One of the most enthusiastic people at last week's Apple iPad 2 launch was Mark Rein, co-founder and vice president of Epic Games.

Epic, based in Cary, N.C., is known for full-bore, action blockbusters, such as "Gears of War" on the Xbox. Its "Unreal" game platform is also widely used by other studios to build games on multiple platforms.

Apple has highlighted Epic's work on "Infinity Blade," a high-definition fantasy title released in December for the iPhone and iPad.

Rein (left) said the iPad is on its way to becoming a game console, with the new version coming Friday having a dual-core processor, improved graphics system and a new accessory for connecting the device to a digital TV.

"For us, it's like Christmas," he said, when we talked at Apple's launch event.

Here's an edited excerpt of our conversation:

Q: I've heard a lot about the iPad being great for casual games. Will this power boost make it better for hard-core action games as well?

A: That's what "Infinity Blade" was -- the first core, triple-A game designed specifically for these environments. So we already think it is.

It means that now, even [with] the casual experiences, you'll be able to make those look even better. Even "Angry Birds" could take advantage of having more computing power.

Q: When will games appear that take advantage of the new iPad's increased power?

A: I don't think it will take very long. "Infinity Blade" (below) will already run faster and better because of this, and we can now turn up the texture detail and turn on some of the effects that we'd turned off on iPad because iPad was a more challenging development environment than iPhone, given the higher resolution screen.

An iPad has 20 percent more pixels on the screen than an iPhone 4, yet the CPU [central processing unit] and GPU [graphics processing unit] in the iPad were introduced before the iPhone 4, so the iPhone 4's more powerful and has more features.

Now this leapfrogs that again, and gives plenty of power to take advantage of the full resolution of the machine.

Q: If you bought the game for an iPad 1, then upgraded to an iPad 2, would you have to buy a new version of the game to get the improvements?

A: No, we will just adjust the game to take advantage of what it can do, the same way we adjust the game for iPhone 4 and 3GS. For us, it's just settings.

Q: Will game developers take advantage of the new HDMI adapter for displaying iPad content on a big TV screen? Could that make it more like a handheld console?

A: Yes, absolutely. I've been actually saying that since the first iPad came out: This is a great way to play games.

It's going to get more feasible -- your game console could be a tablet you walk around with, and you use it as a controller in your home game experience. Or eventually you'll put this down, you'll pick up a DualShock [game controller], this will talk wirelessly or through HDMI to your TV, and you'll play.

That's the future, and Apple has clearly made a big step toward that with their digital [AV] adapter.

Q: Does the iPad 2's processor have enough oomph for big-screen games?

A: I hate to say it, but there are game consoles you buy today that you connect to your TV that don't even hold a candle to this.

Q: Are you talking about the Nintendo Wii?

A: I didn't say a name. This is now more powerful than the first-generation Xbox. This is probably more powerful than a PlayStation 2 or a PlayStation 1 for sure. This is on the road to that, if it's not already.

You can set this down, connect it in and get like a PlayStation controller -- a controller that has Bluetooth -- and away you go. I'd love to see where we could use a controller and play the hard-core experiences on these because that would be great. Especially with a stand, you just stand the thing up and play.

You know, like Microsoft's Kinect -- there's a camera in here and some pretty good processing horsepower. You could make a "Dance Central" game for this thing. The possibilities are getting better and better every year.

Q: Are you going to release Epic's "Bulletstorm" on the iPad now?

A: Would "Bulletstorm" or "Gears of War" be on here? The IP [intellectual property] could be, but I don't think that we'd make that kind of dual-stick type game unless this thing spawned dual sticks -- you know what I mean?

It's just a different experience, what you do for this and what you do for a game console.

The really best experiences for [the iPad] are ones that are really designed for what you do on a touch screen.

But I play "Call of Duty" on it, I like shooters on it. It can be all things.

If you want to be super successful, you have to make the thing that people really want to play on this instead of a game console.

Surging social game developer Zynga just announced that it hired Neil Roseman, a former Amazon.com and startup executive, as vice president leading its new Seattle engineering and product development office.

From 2007 to 2009, Roseman was chief executive of Evri, a Paul Allen-backed semantic search and media service. Earlier he launched Amazon's music category, led the company's digital media business and launched its third-party and enterprise-selling platforms.

San Francisco-based Zynga -- maker of hits such as FarmVille and Mafia Wars -- is looking at offices in the Pioneer Square area for its Seattle outpost. The company's recent funding reportedly values it at about $10 billion.

The hiring of Roseman topped a BusinessWeek story today about talent poaching in the tech industry. It said Zynga used a former Amazon manager to contact Roseman, which led to a one-on-one meeting with Zynga Chief Executive Mark Pincus.

According to the article, "Pincus told Roseman how much he wanted him to lead a team of engineers and assured him he wouldn't have to leave his home near Seattle."

The year started with a thud for the video game industry, which saw U.S. sales fall 5 percent to $1.16 billion in January, according to an NPD report today.

Game hardware sales were down 8 percent compared with January 2010 and sales of new, physical games were down 5 percent.

A lone bright spot was sales of accessories, which grew 6 percent, to $235 million. Maybe everyone who received a console for Christmas finally bought a second controller. Or maybe they were buying dance mats and Kinects, since dance games were among January's top sellers.

NPD no longer provides the monthly sales data for different consoles and the big manufacturers didn't rush out the usual press releases, talking up their January sales.

(Update: I spoke too soon. Microsoft issued a release saying it sold 381,000 Xbox 360 consoles in January, 48,000 more than the same period last year, and overall sales on the platform "topped $551 million.")

"Call of Duty: Black Ops" (pictured) continued to be the top-selling game sold at retail across all platforms.

To draw attention to its upcoming title "Odd Manor," the company's sponsoring NASCAR driver Tayler Malsam in the Camping World Truck Series.

Starting in the series opener at Daytona on Feb. 18, Malsam's truck will sport "Odd Manor" graphics, including a few gnomes on the truck's rear panels.

The social-network game will be released this spring on Facebook. KingX describes it as an "enchanting, folkloric adventure transporting people behind the walls of an enigmatic estate to solve a mystery set in a magical garden of gnomes, faeries, charmed plants, and mystical creatures."

Malsam, a Seattle native and fan of video games, is ready for the gnomes' company.

"It's fun to have them along for the ride at Daytona," he said in the release.

Boosted by the Xbox 360 Kinect launch, November broke a record for video game sales, with $2.99 billion worth of games and hardware sold in the U.S., according to NPD's monthly report.

The Xbox 360 platform accounted for 40 percent of the total industry sales during the month. Xbox accessories -- namely Kinect -- accounted for 60 percent of game accessory sales, the research firm reported.

Altogether game sales were up 9 percent in the month.

Full-year sales of physical games - which account for about 70 percent of game spending and don't include digitally disributed games and mobile apps - should reach $18.8 billion to $19.6 billion, NPD predicts.

"The higher end of that range would essentially be flat to last year. Gains in November offset a good portion of the year-to-date declines," NPD analyst Anita Frazier said in the release.

Nintendo announced that it sold more than 2.7 million game systems in the month - 1.2 million Wiis and 1.5 million DS handhelds per NPD.

"According to our internal numbers, Nintendo sold 600,000 Wii systems during Thanksgiving Week alone, an increase of 50,000 over 2009," Charlie Scibetta, Nintendo of America's senior director of communications, said in the release.

"Call of Duty: Black Ops" was the best-selling game with 8.4 million units sold. It accounted for 25 percent of all games sold in the U.S. last month. The top 10 games sold during the month:

NPD noted that it is now lumping multiplatform games together; if it was reporting titles individually by platform, "Halo: Reach" would have been tenth.

When games are ranked individually by platform, two Kinect titles almost made the top 10. "Dance Central" and "Kinect Sports" were number 11 and 12, according to David Dennis, Xbox group product manager.

"We're very happy with performance across all lines of our business," he said.

An Australian school that offers training in video game development is opening its first U.S. campus in the Seattle area.

The Academy of Interactive Entertainment will begin its first classes in September and should soon have capacity for at least 125 students, according to Chris Erhardt, a former game developer and teacher who will head the school.

The non-profit school will offer certificate programs and continuing education. Courses will be designed for people wanting to work in digital media, game development, special effects and film production.

"We consider ourselves something that fills a niche that currently doesn't get satisfied in Seattle," Erhardt said. "We bring the ability for students to be able to try things in a smaller capacity than, say, a four-year degree program."

If AIE follows the model of its parent organization in Australia, it may also offer the equivalent of community college degrees as well.

"Education is a cornerstone of economic development when you're trying to grow an industry," said Kristina Hudson, director of the Washington Interactive Network trade group, which helped recruit the school to the region.

Hudson said AIE will expand the mix of schools that train people to work at the state's cluster of video game companies. She plans to announce the school's arrival at her group's annual Power of Play meeting Thursday in Redmond.

"The educational programs we can have here to nurture our own to hopefully walk into those jobs when they become available at these companies is ideal," she said.

Erhardt formerly taught at DigiPen Institute of Technology, a Redmond school that offers degrees in video game development and recently expanded to a new campus with programs for high school students. Earlier he worked on games for Activision, Electronic Arts and other companies.

"We don't consider ourselves competition for DigiPen," said Erhardt, who recently was working with AIE in Australia on its international expansion.

Erhardt is still selecting a location for the school in the Seattle area. "We're a boutique operation, not a huge facility," he said.

The school is also expanding to Europe and Asia. It has Australian campuses in Sydney, Melbourne and Canberra.

Seattle was chosen partly because of the potential to form partnerships with organizations in the area, AIE President John De Margheriti said in a prepared statement.

"We evaluated several cities in the West Coast and selected Seattle because of the depth of talented game studios, the deep creative and entrepreneurial talent that exists in this city," he said.

Before starting the school in 1996, De Margheriti co-founded Australian game studio Micro Forte in 1985. He also founded the Game Developers Association of Australia.

SAN FRANCISCO -- During a demo at Dive Into Mobile, serial entrepreneur Steve Perlman showed off new applications running on the OnLive streaming game network, which debuted in 2009.

In addition to streaming video games from data centers to PCs and TVs, OnLive is using its network to stream a virtualized Windows desktop to devices including Apple's iPad and Samsung's Android-based Galaxy Tab.
That enabled Perlman to show the iPad and the Tab running Internet Explorer and the Windows 7 desktop. He also showed a Microsoft Silverlight application running on the iPad and Apple's Quicktime software running on the Galaxy Tab. (Perlman's holding the iPad; hosts Walt Mossberg and Kara Swisher are at right)

"You have unlimited capability because of the supercomputing" that's happening in data centers and streamed to the mobile devices, Perlman said.

Perlman, a former Apple engineer, co-founded WebTV and sold it to Microsoft. Then he created the Moxi set-top box company and sold it to Paul Allen.

There was no word on whether he's hoping to sell OnLive to someone else from Redmond.

Activision today announced even more amazing sales records for Vietnam-era shooter "Call of Duty: Black Ops."

The game grossed $650 million in its first five days, blasting sales records for video games, theatrical movie releases and books. It also beat the $550 million, five-day take of the last edition, "Call of Duty: Modern Warfare 2."
Microsoft chimed in on the release, saying that "Black Ops" set new records on Xbox Live, with more than 5.9 million multiplayer hours and more than 2.6 million unique players on the service since the game's Nov. 9 launch.

The showing "illustrates the mass appeal of interactive entertainment as millions of consumers are choosing to play 'Call of Duty: Black Ops' at unprecedented levels rather than engage in other forms of media," Activision Chief Executive Robert Kotick said in a release.

It's not necessarily either-or though.

I was able to read the newspaper a bit while different levels loaded and during an overly long soliloquy by Viktor Reznov, the mysteriously invincible Russian in the series. Some players may also end up watching more romantic comedies than planned, as penance for spending too much time in virtual Indochina.

Steve Jobs finally landed the Fab Four, and now Microsoft may get the Bizarre 200. Or some of them, perhaps.

Gaming mag Develop is reporting that Microsoft has expressed interest in acquiring Liverpool, England, game studio Bizarre Creations. Or it may just be interested in picking up some of its 200 employees, who are being sacked by parent company Activision.

Bizarre created one of the early hits for the Xbox, the "Project Gotham Racing" franchise. This image is from PGR4, which was released in 2007 and gave players ultra-realistic road racing mixed with classics like sliding around Nurburgring in a Maserati 250F.
But its most recent title, "Blur," wasn't much of a success and news surfaced Tuesday that Activision was closing the studio.

A Bizarre source told Develop that the situation was looking up after a staff meeting today, when word of possible new owners emerged.

The Seattle-based company today said it's launching a mobile, social game service for the Japanese market. Called "Pop Tower," a joint venture with Square Enix subsidiary Taito Corp.

Pop Tower is part of an Asian blitz by the 10-year-old company, which first established the viability of the Seattle-centered casual games business with its breakout hit "Bejeweled."

PopCap opened an Asia-Pacific office in Shanghai in 2008. That led to big projects in the region's largest markets. In August PopCap disclosed plans to partner with RenRen, one of China's largest social networking sites, and in September it announced plans for a Korean multiplayer game service -- PopCap World -- that will be offered with NCsoft.

Pop Tower will include custom, social versions of games such as "Bejeweled," "Chuzzle" and "Zuma" that will be tied together in an entirely new metagame with role-playing game elements, designed for Japanese players.

PopCap previously sold more than 1 million copies of its mobile games in Japan but hasn't previously offered a mobile, social game.

Social games on mobile devices looks set to dominate gaming worldwide and Japan is already ahead of the curve," James Gwertzman, PopCap's vice president for Asia/Pacific, said in the release.

He said the company may use what it learns in Japan to offer mobile, social games internationally.

I hate having to write about this sort of thing, but some people are clinging to the debunked story that Microsoft's Kinect doesn't recognize black people.

Pack journalists and blogs gleefully jumped on the non-story, rushing to report a racial issue where there isn't one. It's all about clicks, right?

The story began when GameSpot.com posted an item Wednesday saying one of its "dark-skinned" employees was recognized "inconsistently" by Kinect and it was unable to "properly identify the other despite repeated calibration attempts."

"However, Kinect had no problems identifying a third dark-skinned GameSpot employee, recognizing his face after a single calibration. Lighter-skinned employees were also consistently picked up on the first try," the site reported.

Remember, Kinect is basically a really fancy camera that constantly shoots and analyzes images of players.

This gets to two obvious facts that are being spun and woven into a huge, raggedy shroud obscuring what's really happening.

Fact one: When you take pictures of people, you get different results depending on lighting conditions and skin tones. Sometimes it's trickier than others.

Fact two: Kinect is sensitive to lighting conditions and not absolutely precise.

Fortunately, Kinect primarily relies on skeletal tracking to play games and for most of its controls. It tracks 48 points on the skeleton. It doesn't matter what color your skin is -- as long as you have a skeleton that moves, you'll be able to play the games.

After the GameSpot story appeared, it was quickly debunked by Consumer Reports.

Unlike GameSpot, Consumer Reports explained its testing and posted a video of testing with black and white players.

The magazine noted that Kinect is affected by light levels and advised people to provide plenty of light in the room where it's used.

Consumer Reports said lighting conditions also affected the performance of an HP webcam that caused a similar stir. From its report:

The log-in problem is related to low-level lighting and not directly to players' skin color. Like the HP webcam, the Kinect camera needs enough light and contrast to determine features in a person's face before it can perform software recognition and log someone into the game console automatically.

Essentially, the Kinect recognized both players at light levels typically used in living rooms at night and failed to recognize both players when the lights were turned down lower. So far, we did not experience any instance where one player was recognized and the other wasn't under the same lighting conditions.

This problem didn't prevent anyone who was affected from playing Kinect games, since it can "see" and track players' bodies and motions using a built-in infrared lighting system.

Consumer Reports isn't the only media outlet that didn't see a racial issue with Kinect.

Oprah raved about the system on her show a few weeks ago, and the New York Times' Seth Schiesel gave Kinect a glowing review, even though it sometimes takes a few tries to activate a control.

"Does the system recognize every voice command exactly the first time? Of course not. But it works consistently enough that I never wanted to reach for those relics of the past: a plastic controller or remote control," wrote Schiesel, who is black.

Microsoft finally weighed in with a response to GameSpot:

"Kinect works with people of all skin tones. And just like a camera, optimal lighting is best. Anyone experiencing issues with facial recognition should adjust their lighting settings, as instructed in the Kinect Tuner."

Microsoft could also reassure people that they can get their money back if the system doesn't work for them.

The situation highlights the varying performance of Kinect's facial recognition system. It missed me a few times in late afternoon when the light changed in my living room. The system advises you to rescan your face at different times of day to optimize its recognition, but I didn't bother.

Sometimes it takes a lot of waving to get Kinect's attention, and it can lose track of small children moving too much around the room.

Kinect works well enough to play new games and give you a taste of the future. But it's definitely going to be awhile before this sort of technology is ready for cash registers and airport security systems.

Maybe the flap is a mark of success: Kinect is already making it harder for people to tell the difference between reality and make believe.

After the outcry caused by its story, GameSpot did more testing in different rooms and with the players wearing different clothes.

Guess what happened? Kinect correctly identified the same "dark-skinned" players on the first try.

But Kinect hiccuped when one changed to a black shirt from a blue shirt. A fourth employee with dark skin brought in for testing wasn't recognized.

From Gamespot's update:

At first, the two employees who originally would not be recognized by the camera were correctly identified on the first try. However, when one changed from a light blue shirt to a black shirt (but stayed in the same room with the same lighting), the camera again failed to recognize him after multiple calibration tests. It also failed to recognize another darker-skinned GameSpot employee after four calibration attempts.

Bottom line, some Kinect users may be frustrated by its performance but there is no consistent effect attributable to race.

Kinect isn't insensitive. The problem is that it's overly sensitive and a little touchy. How Seattle can it get?

(The stories were staggered in part because Microsoft, as part of its hyper structured launch program, wouldn't provide test gear to news organizations unless they promised to hold reviews until 9 p.m. Wednesday or midnight eastern time, when the consoles first went on sale. Oprah and Ellen didn't count.)

The review, with some photos added:

Sometimes the intense sights and sounds of modern video games stay with you, like scenes from a great movie.

Microsoft's radical new Kinect controller for the Xbox 360 stays with you, as well.

After you're done hopping and waving in front of the TV screen, long-forgotten muscles will remind you of the fun you had with the $150 gadget.

How about a free digital magazine, video or newspaper while you slurp that latte?

They're being given away by Starbucks on an ambitious new digital media network that's launching in the company's stores on Wednesday.

The free Starbucks Digital Network includes premium news, entertainment and health content that's viewable only in the stores on phones, computers and tablet devices. No registration is required, unless customers want to log in to their Starbucks account.

It's a complete refresh of the Starbucks' in-store digital offering, which has evolved in fits and starts over the last decade as the company experimented with partnerships with Apple, kiosks and phone companies.

"There is a pull-through of that here but the rest of it is really new, an exciting new way that we can enhance the customer experience and engage with customers," said Adam Brotman, vice president of Starbucks Digital Ventures.

The network will immediately become a major digital property, facing tens of millions of customers every month. Last month Starbucks saw more than 30 million users logging into store networks, where WiFi has been free since last July and where the "SDN" will be the initial landing page.

More than half of the WiFi logins were done with mobile devices, Brotman said, so the network is designed to display well on screens ranging from phones to iPads to laptops.
Yahoo built the platform for Starbucks and is powering the service, in part from its Wenatchee datacenter. It's a flexible design that can rotate and add new content and Web applications chosen by Starbucks.

The network is largely free of ads. Starbucks is hoping to make money from the network by sharing revenue on content sold through the network, such as iTunes music and newspaper subscriptions.

Content partners are also expected to provide something special, such as free access to premium content or exclusive previews. That will enhance the customer experience in Starbucks stores and potentially draw more customers, Brotman said.

It's not just an aggregation of Web content, he said.

"This is something where we are specifically hand-picking great partners that we feel our customers will be interested in being exposed to ... getting something from those partners that they can't get anywhere else or would otherwise have to pay for," Brotman said.

News content includes access to premium content from The New York Times, Wall Street Journal and USA Today. Magazine publisher Rodale is filling out a "wellness" channel with content from publications such as Men's Health, Women's Health, Runner's World, Bicycling and Prevention.

Apple is prominent in the entertainment channel, which has an iTunes store featuring Starbucks' "pick of the week." The channel also provides free access to books through the Bookish Reading Club service, viewable in a new HTML5 reading application.

A local channel - "my neighborhood" - connects to the Foursquare location service, provides Zagat listings and includes news from Yahoo and AOL's fledgling Patch news service. It also connects to DonorsChoose.org, an organization that lets users fulfill requests made by local school classrooms.

The network is designed with a series of panels that can be rotated and updated with new services in the future. Brotman said he's open to work with application developers wanting to contribute, although the company's being deliberate about how the network expands.

Brotman, a startup and Corbis veteran, was hired two years ago to lead the Digital Ventures group. It now has a dozen people working with different organizations across Starbucks to create and launch new digital projects.

The Starbucks network should give Yahoo a boost. Yahoo is not only running the service, it's powering its search feature and providing content.

Yahoo expects the network "will definitely increase" engagement and duration of time people spend with Yahoo, said Burke Culligan, Yahoo's vice president of product management.

Two high-profile Seattle tech investors are starting a new social game company called "King of the Web" that will launch in December.

The company is being started by Nick Hanauer, an early investor in Amazon.com and founder of aQuantive, and Rich Barton, the former Expedia chief executive and co-founder of Zillow.

Hanauer confirmed the venture but provided few details, saying the company will come out later this year.

"We're sort of in development mode right now and we'll launch in December," he said. "Rich and I think it's a really really cool idea. The space is really big and growing fast."

Social games -- including multiplayer games played via social networks such as Facebook -- are a big business with hundreds of millions of players. Business hits include Zynga, which raised $520 million, and Playdom, which was sold to Disney for $563 million in July.

Google and Apple are also working to build up games on their desktop, tablet and mobile platforms.

Hanauer said there's still more opportunity for new social-game companies.

"Great content which entertains will for a very long time be a growth industry on the Internet," he said. "We think we have an idea that can create some really really great content."

The company is being started with a group of veterans from aQuantive, he said.

"It's definitely an idea where if it works it will be huge," he said. "It's a big idea."

Here's another way to level the playing field with China, besides getting the country to stop manipulating its currency:

Get Microsoft to start selling Xbox 360 consoles in the country, pre-loaded with "Halo: Reach."

In the six days after "Reach" launched last week, players spent 5,901 man years playing the game online, according to "Halo" creator Bungie.

That doesn't include the millions of hours people spent playing the game's campaign offline, and the hours (or days?) of reduced productivity at work the following mornings.

Bungie also reported yesterday that more than 70 million online "Reach" games have been played. The game's online population surpassed that of "Halo 3," beating its all time record of concurrent players by 65 percent.

Bungie's stats were a sort of rebuttal to the Xbox Live weekly play report that showed "Call of Duty: Modern Warfare 2" still had more unique users on the service the week of Sept. 13-19, but "Reach" wasn't available the full week.

Xbox's Larry Hryb - who caused a kerfluffle when the numbers came out this week with an error - yesterday afternoon provided an update, saying that "Reach" was the top game on Xbox Live for the past seven days with nearly four times the unique users as "Halo 3" had the week of Sept. 13.

Maybe it's time for Bungie to show the WTO how to set up a Banhammer anti-cheating system. One reason the hammer comes down: "Manipulating network conditions to give yourself an advantage, or to the detriment of the experience for other players."

An unusual new game venture called Spry Fox launched this week in Juanita, aiming to bring a Hollywood-style business approach to the online, Flash games industry.

Founders David Edery and Daniel Cook formerly worked at Microsoft, where Edery was portfolio manager of Xbox Live Arcade and Cook was a game designer.

Instead of raising money and building a big studio, they're operating Spry Fox more like a movie studio, assembling temporary teams for individual game projects and sharing the proceeds with the team.

Spry Fox has five games in development with partners in Seattle, the San Francisco area, Australia and Vancouver, B.C. They range from individual developers to small game startups, all drawing on the expertise and connections of Edery and Cook. It's a distributed company, but a hub is Edery's home in Juanita.

Eventually Spry Fox could also provide funding to the teams it works with but for now they're all self-funded.

Edery, who ran a consulting business after leaving Microsoft in 2008, said Spry Fox games - including a new version of the steampunk flying game Steambirds - will appear on Apple and Android devices. But the company's primary focus is downloadable games based on Adobe Flash and distributed through game portals such as Kongregate.

That market appears saturated, but Edery said there's still opportunity for quality games such as Steambirds, which has been played by more than 10 million people. If a Flash game hooks players and lead to microtransactions and subscriptions, there's the potential for the title to generate millions of dollars in a month, he said.

Apple's platform is an interesting opportunity but it doesn't come close to the market share of Flash, which is running on a billion browsers worldwide, Edery said.

In short, it's pretty fun and has potential for action games. Teens and older players may prefer it over the Wii if given a choice. It's a nice addition to the mix of motion-control systems available this year.

But the Move requires more fussing than expected, including frequent calibration. Using the Move with an on-screen keyboard is also tedious and challenging.

It's also expensive to get started, if you don't already have a PS3. But there's a big variety of games available and in the pipeline so Move probably won't have as slow a start as the console did when it first launched.

Today's column:

It's strange and cruel to have the most amazing toys arrive when we can least afford them.
This happened during the Depression, when Bugatti and Alfa Romeo blended gorgeous design and bleeding-edge technology to produce the greatest sports cars in history.

Now, as poverty reaches record levels in the U.S., it's Sony and Microsoft releasing dazzling new video-game systems that see and track players and project them into high-definition action on the screen.

Sony's Move and Microsoft's Kinect systems are a leap forward for home entertainment and may change the way televisions and other electronic devices are used in the future.

Microsoft tonight announced that "Halo: Reach" sales grossed $200 million in its first day, making it the best-selling game in the company's history.

"'Halo: Reach' is the biggest game Microsoft has ever released and its launch has already surpassed every game, movie and entertainment launch this year," Phil Spencer, vice president of Microsoft Game Studios, said in the release.

The total includes U.S. and European sales. For comparison, "Halo 3" sold $170 million in the U.S. alone on its first day in 2007.

It is an amazing number for Reach, especially ahead of the holidays and during a down economy.

But bragging rights may only last until Activision releases "Call of Duty: Black Ops" in November for the Xbox 360 - plus the PlayStation 3 and Wii. The last version in 2009 sold $310 million in its debut on multiple platforms in the U.S. and U.K. I wonder how Reach would have done if it wasn't an Xbox exclusive.

"As we transform RealNetworks, we will focus on areas with strong revenue growth and profit potential that will realize the value of our core businesses. The most compelling growth opportunity in games today is social games, and this acquisition is part of our commitment to make our entire GameHouse business social."

Backstage has 18 employees, who will remain based in Victoria. Its catalog includes "Pull Tabs," "Scratch and Win," "Slots" and "Vinyl City."

If you love action video games with sci-fi themes, "Halo: Reach" may be the highlight of 2010.

It may also be a highlight for Microsoft, which is counting on huge sales of the flagship game for its Xbox 360 console.

The launch of "Reach" at 12:01 a.m. Tuesday marks the start of an ultracompetitive holiday season with a series of blockbusters coming to Sony's PlayStation 3 and Nintendo's Wii.

"Reach" sets a high bar. It's a thrilling and occasionally breathtaking update of the flagship game for Microsoft's Xbox console, with new characters, guns, vehicles and tools to build and share custom games online.

The game is also bittersweet for fans of the hit series that Bellevue-based developer Bungie first released in 2001.

It's a lovingly crafted prequel that clears up any lingering confusion about the "Halo" story and the franchise's artistic and technical ambitions before Bungie moves on to other projects.

Bungie stuffed "Reach" with new features and details. The landscape and design are brighter and crisper than previous versions, - memorable scenes include earthward views from a launching rocket, and twilight views across miles of open country -- but the story is progressively darker, reflecting the grimness of today's wars.

Critics for the most part are raving. Fans began lining up Sunday outside the main launch event in New York. In Seattle, the crowd formed Monday afternoon for the evening launch party at the Experience Music Project.

Here are a few numbers to put the tonight's launch of "Halo: Reach" into perspective.

After a rocky start last year, Bellevue game startup Smith & Tinker is overhauling its online game platform for young boys.

The company stopped making handheld devices to play its "Nanovor" action-collecting game offline and instead is focusing on browser-based gaming and gaming on Apple devices and Facebook.

It also announced a major licensing agreement with Disney's Marvel portfolio for games that will appear starting in the second quarter 2011. The new Nanovor game is appearing this fall, and versions for Apple iOS devices are planned for the fourth quarter.

"We're in a fairly good place from a development standpoint at this point and our existing investors are continuing to be supportive of us," said co-founder Joe Lawandus, who was earlier vice president and general manager of Disney Toys & Sporting Goods.

Smith & Tinker launched Nanovor with a major promotional campaign and retail presence last holiday season, using $29 million raised from Paul Allen and other investors.

The smaller team was still able to re-create the Nanovor game with new 3-D graphics and social networking features in a lighter software package that runs in browsers, without the download client the game originally required.

The sci-fi game is aimed at pre-teen boys, who can buy collectible characters and then upgrade them with achievements earned by playing games on the site.

The underlying platform will now be used to support games using Marvel comic-book characters. Those games will aim for a broader range of players and be playable on Facebook, as well as in browsers and on Apple mobile devices.

Co-founder Jordan Weisman, a former creative director at Microsoft's games business, said the plan was to eventually use the platform for characters developed outside the company.

"It's always been in the back of our heads," he said. "Whenever you do a bunch of innovation, one of the things you look at is how can you exploit that innovation and investment over more franchises."

Lawandus said the company's planning to raise more money this year -- under $10 million -- to carry it through to profitability.

Get ready for another huge "Halo" party at the Experience Music Project.

Microsoft and Bungie Studios are officially launching "Halo: Reach" on Monday night in New York, at the Best Buy Theater in Times Square.

But the place to be for "Halo" fans around here will be a launch party Monday night at the EMP, similar to the event held last year for the launch of "Halo 3: ODST."

Details of the event are still to come, but a spokesman said it's open to the public and fans are expected to begin lining up in the afternoon. Inside there will be stations to play the game before its midnight release, tournaments and prizes.

Miami-based Origin built the Xeon beast for CPU Magazine's annual "Dream Machine" feature, but it can be had for $16,999. Insert your own Bill Gates joke here.

To get the Xbox consoles into the cases, Origin takes them apart, re-arranges the components inside and connects them to the liquid-cooling systems. A spokesman said, "They strategically mod it and rearrange the components and ports for optimal usage within the PC."

Origin designed the systems so you can play games on the 360 "while your computer is busy dominating whatever other task it is assigned."

I wonder if Cray could squeeze a 360 inside its Windows 7 Xeon box, the $35,449.99 CX1-iWS. It runs the same 24-core Xeon 5600 processors as the upper-end Big O. Could they at least get a Wii in there, so the scientists have something to do while they're running simulations of the weather or nuclear explosions?

A liberal arts college in Indiana is requiring its incoming freshman to play "Portal," the hit puzzle game from Bellevue's Valve Software.

"Alongside Gilgamesh, Aristotle's Politics, John Donne's poetry, Shakespeare's Hamlet, and the Tao Te Ching, freshmen at Wabash will also encounter a video game called Portal," Michael Abbott, a Wabash theater professor and game enthusiast, announced on his Brainy Gamer blog.

The game is required as part of mandatory course called Enduring Questions, which addresses "fundamental questions of humanity from multiple perspectives."

Abbott explained that he was charged with finding alternative material such as films, music and art to expand the course.

I recalled reading Daniel Johnson's recent essay on the game and its strong connections to Erving Goffman's seminal Presentation of Self in Everyday Life. One of the central questions of our new course, "Who am I?" is the focus of Goffman's study. He contends we strive to control how we're perceived by others, and he uses the metaphor of an actor performing on a stage to illustrate his ideas. Johnson describes it this way:

... we're acting out a role that requires constant management ... of the interaction. The front stage is the grounds of the performance. The backstage is a place we rarely ever want to reveal to others, It contains the truth of our obstruction and to reveal it would be to defraud our identity in front of the audience -- it simply spoils the illusion of where we're placing ourself in the interaction.

This tension between backstage machination and onstage performance is precisely what Portal depicts so perfectly -- and, no small detail, so interactively.

In the game (pictured below), players progress by solving puzzles and manipulating the environment, opening portals to move through the space.

Valve may have to start an education discount program. Spokesman Doug Lombardi said the company wasn't involved and learned of the course from news reports. He said via e-mail:

"We obviously are flattered by it, and feel it's very strong validation that Portal (and the upcoming Portal 2) are games that make you smart, and the promotion of problem solving found in Portal and Portal 2 make them they type of games that parents DO want their kids to play,"

Lombardi said Portal is being used in game design courses, but this is the first time the company's heard of its use in traditional curriculum.

"Who knows? Maybe it will one day become as universally found in campus bookstores," he said.

Portal has an academic history. The game was created by students at Redmond game college DigiPen Institute of Technology.

Valve representatives saw Portal during a student showcase, hired the team and released the game in late 2007. The sequel -- "Portal 2" -- has won high praise from critics and is one of the most-anticipated games coming in 2011.

DigiPen, by the way, is starting classes next month in its new Redmond campus on Willows Road where it's having opening ceremonies at 1 p.m. Friday.

Organizers of the PAX mega game conference in Seattle next week say the event is almost sold out, suggesting it's going to draw close to the 60,750 that attended last year.

The event runs Sept. 3 to 5 at the Washington State Convention and Trade Center. PAX features tournaments, panel discussions, concerts and an exhibit hall where more than 70 companies will display video games, PC games and tabletop games.

Three-day passes are sold out, as are Friday and Saturday tickets. All that's left are $35 single-day passes for Sunday.

Here's a story we published just before the first PAX in 2004, when 1,400 people were registered.

Here's raw video of a walk though PAX last year. There's some funny dancing around 4:30:

Microsoft chose the huge Gamescom conference in Cologne, Germany, to unveil the first batch of Xbox Live games that will be available for Windows Phone 7 devices when they go on sale this holiday season.

The company also confirmed that it's building up a mobile games studio in Redmond dedicated to the Windows Phone platform.

As Microsoft takes on the iPhone and Android juggernauts this holiday season, a key weapon is going to be its Xbox business, including games, relationships with developers, game-building tools and the Xbox Live network.

Meanwhile, Apple has been pushing hard to raise the profile of games on the iPhone and iPad, and Google has been investing in mobile game companies as it grows its Android platform.

Leaders of Microsoft's new mobile studio wouldn't say whether the company is going to start buying or backing mobile game developers. But they did say Microsoft is developing new games internally to showcase the technical capabilities of the Windows Phone platform.

The overall effort is similar to the buildup of Microsoft Game Studios prior to the Xbox console debut, according to Matt Booty, the former chief executive of Midway Games, who was hired in March to start building a mobile studio.

An Xbox Live tile has been shown on the home screen of Windows Phone 7 devices since Microsoft rolled out the platform in February, but until now the company hasn't detailed specific games. Word of the special mobile studio just surfaced last week in job postings.

Today, it's announcing more than 50 games that will be available for the phone at launch. They include a few mobile counterparts of console games such as "Assasins Creed" and "Guitar Hero 5," plus some familiar titles such as "Bejeweled" and "Frogger." The company wouldn't say yet how much the games will cost or whether any will be preloaded on the phones.

There will be two categories of games for Windows Phone. One includes games that connect with Xbox Live, using the online service's achievement system and networking features. Those games will go through extra review by Microsoft, which will publish them.

Games without Xbox Live will also be available through the Windows Phone app marketplace.

During a demo in Seattle last week, a standout was a "Crackdown 2: Project Sunburst" from Microsoft Game Studios.
It's a simple tower defense game in which you use cannons mounted on a building to repel attackers.

The twist is that you can set the cannons up on any building captured by Bing's satellite imagery. You can pretend to be defending the Space Needle, the White House, Qwest Field or even your house, so you'll be blasting attackers marching up your street.

At left is a screenshot showing the game overlaid on the conference center in Cologne.

A player's Xbox Live avatar gets special treatment on the phone. The animated, cartoonish character waves and peeks out through the Xbox Live tile on the phone's display, like a sprite inside the device.

Tapping on the tile, an avatar can be enlarged to fill the screen and poked and manipulated with the touchscreen. It can also activate applications. Instead of launching a flashlight application, for instance, you can choose a flashlight from a list of gadgets available to the avatar, which then picks up the light and shines it outward.

Microsoft's new mobile studio will create some original games. But much of its effort will be working with game developers inside and outside of Microsoft, to get their titles onto the Windows Phone platform.

Booty wouldn't say how big the mobile studio will become, but he said Microsoft is making a major commitment to the group and "we've got huge resources."

Still being worked out is the path game developers might take with a game developed for Windows Phone and then extended to upcoming Windows tablets. On slates or tablets, Windows is the primary platform and it has extensive resources for developers, Booty said.

"We want the developer to have a number of avenues to expose their content," he said.

Microsoft is crowing over the monthly NPD report on U.S. video-game sales, which show a 118 percent jump in Xbox console sales during July.

That was the most dramatic gain in a month when overall game sales were down 1 percent, to $846.5 million. July's usually relatively slow but hardware sales were 12 percent higher than July 2009, while game software sales were down 8 percent.

Microsoft sold 443,500 consoles, more than double sales in July 2009.

"It's a great position to be in and this isn't really even our busy season," Xbox spokesman David Dennis said.

But don't read it as a new trend. The Xbox sales were helped by a launch bounce that may not happen again until the Kinect goes on sale in November.

Xbox sales in July were boosted by the release of the new slimmer and quieter model (shown, with Kinect). Retailers also slashed the price of the previous consoles, which could be had for under $150 during July.
Sony had the same launch effect last September, when PS3 sales doubled after a $100 price cut and the release of a slimmer model. The company sold 491,800 units that month.

Microsoft also cleaned up in the game accessory category, where the 1600 point Xbox Live card was the best-selling accessory for the fifth month running.

Another bright spot for the month was PC games, which rode the success of "Starcraft II" to a 103 percent gain, dollar-wise.

Apparently anticipating Microsoft's shining in the closely watched NPD report, Nintendo on Tuesday talked up Wii sales. It said 30 million units have been sold in the U.S. since its launch in November 2006.

Nintendo said that "further establishes Wii as the fastest-selling console in the history of the industry, reaching this milestone 15 months faster than the next best-selling console."

Sony also issued a statement today on the NPD report, noting that PS3 console sales have posted monthly sale gains for 12 consecutive months. They're up 76 percent since July 2009 and 45 percent year-to-date in the U.S.

Here are excerpts from my interview with Bungie's Marcus Lehto, "Halo Reach" creative director, that led to today's story on the game coming out Sept. 14.

Q: You've got more women in the game. Was that a business decision to reflect the market, or influenced by developers with female players in their families?

A: We always want to be sure we're trying to be as inclusive as possible with players. That's one of the reasons in player customization you can choose a real female Spartan now, and choose a real female voice to go with her, and kit her out just like you would male Spartans. You can do some really neat stuff there, and it's really cool too, because contextually all the characters speak to you appropriately then with regards to your gender, in cinematics and also in gameplay itself.

Q: That's new - to have gender-appropriate cinematics even?

A: Yes, that's something I really pushed for on this project. I wanted to make sure both male and female were treated equally as far as player character was concerned and you could really open up the audience, hopefully, to a broader group of folks.

Q: When you make a decision like that, how much is driven by business and marketing decisions about getting X more players?

Ed Fries, the former head of Microsoft Game Studios, built the game as a hobby - partly to see if he could still build games on the platform that launched his career.

Back in his Sammamish High School days, Fries was given an Atari console for Christmas. It inspired him to start programming, first in Basic and then assembly language.

The breakout was a "Frogger" clone he made called "Froggy" that went viral, after he shared it with a few friends. In 1981, when Fries was a junior, a game publisher from California tracked him down and showed up with a contract offer.

After doing a few other things since his 2004 retirement from Microsoft, Fries read "Racing the Beam," a book about programming for the Atari 2600 and started in on "Halo 2600."

As Fries explained on the Halo 2600 Facebook page, the trick with Atari programming is that the machine only had "128 bytes of RAM and without bank switching the maximum program size is just over 4000 bytes."

Fries said he thought it will appeal mostly to the small community of Atari programming enthusiasts who stay in touch through sites like Atariage.com.

"I thought these guy will care but probably no one else will," he said in a phone interview.

But "Halo 2600" is suddenly getting all sorts of attention, after being written up by most major gaming sites. So far there are no plans to commercialize the game.

How about putting in Xbox Live Arcade? "If they want to do it, they're welcome," Fries said.

Fries isn't too worried about being hassled by copyright lawyers from Microsoft or Bungie, the Kirkland studio that created the "Halo" franchise. He kept both in touch as the project evolved.

He mentioned the game to Robbie Bach, Microsoft's president of entertainment and devices, when they had coffee recently.

"I gave him a chance to complain,'' Fries said. "He just laughed and thought it was funny."

If it weren't overcast today, you might have seen a Big Fish on top of Mount Rainier.

That would be Alexey Tugaenko, a developer of games for Seattle's Big Fish Games.

Tugaenko won a contest that Big Fish held for the best third-party game released on the site between July 2009 and March 2010. His Top Evidence Studios in Kiev, Ukraine, won for producing the hit "Haunted Manor: Lord of Mirrors."

The prize was a climb to the top of Rainier with famed climber Ed Viesturs, a Bainbridge Island resident who is also the keynote speaker at next week's Casual Connect game conference in Seattle.

They reached the summit this morning at 7 a.m., after starting out on their climb Thursday morning.

Here are Viesturs, Tugaenko and RMI guide Mike Uchal in a photo courtesy of Viesturs:

Sales of video game software in the U.S. fell 15 percent to $531 million last month, according to the monthly NPD report.

But that was offset partly by sales of game consoles, including big gains for Microsoft's Xbox 360 and Sony's PlayStation 3. Game hardware sales were up 5 percent to $402 million. The number of console units sold was up 35 percent in the month.

Total industry sales during June were $1.1 billion, down 6 percent. But NPD analyst, Anita Frazier, is expecting the year to end with a bang and may match last year's $20 billion in sales.

"Given the strong slate of content still to come, and the release of the Move and Kinect controllers, which I believe will spark additional interest in gaming, I think we could see the total year new physical retail sales come in at $20 billion," she said in NPD's release.

The best-selling accessory last month was the Xbox 360 1,600 point card.

Here are the top 10 games sold in the U.S. last month. Notably missing is the new Tiger Woods PGA Tour 11 game, which sold 68 percent fewer copies than last year's edition did in its first month, NPD said in the release.

Zombie Studios' action shooting game "BlackLight: Tango Down" is debuting on Xbox Live today, the start of a multimedia media franchise for the venerable Pioneer Square company.

Highlights of the game -- which is being pitched as a blend of "Blade Runner" and "Call of Duty" -- are its weapon customization system and a "hyper reality visor" imaging system loosely based on systems used by real soldiers.

"BlackLight" is being sold for $15 as a downloadable game on Xbox Live Arcade. Versions for the PlayStation 3 and PC will appear in a few weeks on PlayStation Network and the Games for Windows Live service.

Zombie has been making military-themed games since it began in 1994, including the government-funded "America's Army." Chief Executive Mark Long is a retired major who worked in military research and development before entering the game business.

"BlackLight" won a few kudos from critics at the E3 show last month in Los Angeles, but didn't make it into the upper tier that won coveted Game Critics Awards chosen by 31 publications.

Bellevue's Valve was the local champion, with its "Portal 2" winning "Best PC Game" and "Best Action/Adventure Game."

Nintendo's 3DS -- the 3-D version of its DS handheld game system -- won best of show and best hardware, beating Microsoft's Kinect and Sony's Move controllers.

The Northwest can also lay claim to the best sports game of the show - NBA Jam, which was devleped by Electronic Arts Canada in Vancouver, B.C.

Other Game Critics Awards:

Best Original Game
"Dance Central" (Harmonix/MTV Games/Microsoft for Xbox 360)

Best Console Game
"Rage" (id Software/Bethesda for PC, PS3 and Xbox 360)

Best Handheld Game
"God of War: Ghost of Sparta" (Ready at Dawn/Sony Santa Monica for PSP)

Best Action Game
"Rage" (id Software/Bethesda for PC, PS3 and Xbox 360)

Best Role Playing Game
"Star Wars: The Old Republic" (BioWare Austin/LucasArts/EA for PC)

Best Fighting Game
"Marvel vs. Capcom 3: Fate of Two Worlds" (Capcom for PS3 and Xbox 360)

But the Xbox 360 and PS3 platforms were strong, with the Xbox contributing the biggest share of industry sales so far in 2010. Sony's PlayStation 3 saw the biggest percentage growth, with sales of hardware, software and accessories up 32 percent in May.

Microsoft: "Xbox 360 continues to outsell the PlayStation 3 at retail for the fifth consecutive year and every single month of 2010. ... Half of May's best-selling console titles are on Xbox 360."

Sony: "In May, we experienced our tenth consecutive month of year over year growth, and it is clear that the demand for PlayStation 3 and its incredible content is not subsiding as evidenced by an increase of 18% in PS3 hardware sales and revenue increase of 58% in PS3 software sales since last May."

LOS ANGELES -- The interview with Cliff Bleszinski, design director of Epic Games, was supposed to cover "Gears of War 3," the next version of the Xbox 360 hit.

But he took a few other shots.

North Carolina-based Epic sold more than 12 million copies of the first two versions of "Gears," an ultra bloody, military-themed shooting game.

"Gears 3" goes on sale in April, extending the run of "big three" shooting games for the Xbox that begins with "Halo: Reach" on Sept. 14 and "Call of Duty: Black Ops" on Nov. 9.

Bleszinski outlined improvements, such as the ability to attack enemies with a chainsaw and then kick them toward other enemies where they explode, so "you get more deaths that way."

Then the influential and outspoken developer touched on a few other topics while holding court with a handful of reporters in Microsoft's treehouse-like pressroom elevated above the E3 show floor. Here's an edited sample.

LOS ANGELES -- Theoretically anyone can learn the cool new moves, according to Harmonix, which demonstrated its new "Dance Central" game for the Xbox Kinect during Microsoft's press event today.

Players are taught dance moves and then compete in competitions, during which their avatars are displayed on the screen via Kinect, adding a new layer to the rhythm game genre.

"Dance Central" includes more than 600 dance moves plus 90 routines, including some from original music videos, along with a soundtrack of pop, hip hop and R&B music ranging from Lady Gaga to the Beastie Boys.

To demonstrate its educational value, Harmonix brought out one of its pasty developers to show how he learned to dance with the game. He's at lower left by the podium and his avatar is on the big screen in this clip:

LOS ANGELES -- So much for the mysterious "Project Natal" code name. It's given way to Kinect, the official name for the new motion tracking controller and camera system coming to the Xbox in November.

Kinect is a combination of kinetic and connect, representing the controller's dual purpose - giving the console motion control plus new communication capabilities such as video chatting and sharing in-game photos captured with the device.

Microsoft managed to keep the name secret until just before an elaborate Cirque du Soleil production tonight that the company commissioned for the Kinect launch.

But USA Today - which had worked with Microsoft on a Kinect story to be published after the event - briefly posted the story earlier Sunday. Game and gadget blogs pounced before the story was taken down, and the word was out an hour or so before the Cirque production began.

It was awkward because most of the reporters covering the game business were working their way through Microsoft's elaborate entry system for the Cirque showing, during which they were barred from using phones or other electronic devices.

The show is being staged for two nights only, at Galen Center, the University of Southern California's basketball arena. It's completely different than the Cirque show now being put on in Microsoft's backyard in Redmond.

For Kinect, Cirque created a specatacle with a tropical islandish theme that faded into a series of Kinect demonstrations done by a pretend family in a rotating living room that at times had the family upside down, sitting in a couch on the ceiling, with a performer walking upside down across the ceiling.

Attending were 3,000 Microsoft employees, industry partners and reporters who had to don white ponchos with shoulder pads that glowed and changed colors during the finale.

A boy in safari clothes rode in on a mechanized elephant and climbed a rock mountain as drums and chanting grew more intense. Then the uppermost rock turned into a huge ball with the Xbox logo, with the boy on top. (Here's a picture provided by Microsoft)

He asked for a name and letters on a giant screen unscrambled to read "Kinect."

The production was Microsoft's most extravagent launch since the Rolling Stones were tapped for Windows 95's theme song. It's going to be broadcast on MTV, Nickelodeon and other channels Tuesday.

Mike Delman, vice president for the interactive entertainment business, wouldn't say how much the show cost but said that the broad exposure it's going to receive through TV broadcasts "make it an exceptional bargain for us."

"I think of it as a massive awareness-builder," he said.

Yasmine Khalil, events director for Montreal-based Cirque du Soleil, said they "wanted to create a legend" with the show by performing it only twice this week, once for Microsoft and its partners and a second show for the public.

"We don't do commercials, we are storytellers,'' she said.

Cirque was excited to work with Kinect, which it sees as more than just a gadget. "We don't see it as a product, we see it as something else," she said.

So will Cirque now produce its own Kinect game for the Xbox?

"Maybe," Khalil said. "You never know."

Games shown during the performance included brief glimpses of a "Star Wars" title with gesture-controlled light sabers, sports games such as beach volleyball, hurdles and javelin, and the clearest hit in the bunch: A pet game with a cute tiger cub that approached the player, who could "pet" the animal using Kinect.

Microsoft's apparently going to take on Webkins with the tiger game. Guests were given stuffed animals with special coded tags for the game. USA Today's story said the game is called "Kinectimals" and it will let players train and play with 20 different kinds of virtual cats.

Hard-core gamers attending the show may smirk at the Kinect name and the family orientation of the games shown during the Cirque production.

But as Stephen Tolouse, Xbox Live director of policy and enforcement, noted in a blog post tonight, a lot of people also made fun of Nintendo for choosing the name Wii.

"And yet look at how many units it's sold. The trick is in the magic of the experience," he wrote.

Tolouse also talked about the challenge of replacing the "Project Natal" name:

It's really hard when you have a cool "code name" that lasts for so long to replace it with its true name, a name that it really deserves to communicate why it's desirable. Code names are meant to be cool, as code names. True product and technology names are far more difficult. Marketing people get a really bad rap when they face a challenge like that and there's often a lot of eye rolling and "what were they thinking" that goes on. Coming up with these things is a high wire act with no net.

Tolouse, at least, believes Kinect is "a perfect name for this technology" and said the marketing team "nailed it."

We'll see how things go this holiday season. Either way, I want to buy my kids that tiger game.

RANCHO PALOS VERDES, Calif. -- A few weeks ahead of its launch, the OnLive online gaming service was demonstrated at the All Things Digital conference by founder Steve Perlman.

Using a new compression technology, the service delivers console-type games that run on the company's datacenter and are played through a small software client downloaded to a PC by players. Perlman demonstrated the service running the game "Borderlands" on an iPad and iPhone, but it didn't work on the phone.

Later in the year it will sell a adapter about the size of an iPod for displaying and playing games on a TV. It may eventually be used for streaming movies as well.

"This is cloud computing in the purest sense of the world ... it's the thinnest of clients," Perlman said.

You could say that OnLive's seed capital came from Microsoft. Perlman earlier sold WebTV to Microsoft and Moxi to Paul Allen.

OnLive was unveiled in March 2009 and is launching its service June 17 at the E3 gaming conference in Los Angeles. Prices will be disclosed then, but Perlman said the service will cost less than $14 per month.

Perlman said the games can be played without lag by people who live within 1,000 miles of OnLive's servers, which so far are located in Silicon Valley, Dallas and the Washington, D.C. area.

It costs as much as a console and doesn't sense gestures like Project Natal.

But game playing dads may still covet the new Ferrari Wireless GT Cockpit 430 Scuderia Edition controller from Thrustmaster.

The folding metal controller has 50 hours of battery life, 10 meters of range and weighs 23 pounds. It works with PCs and the PlayStation 3; a spokeswoman said there aren't currently plans for an Xbox version.

"We are witnessing the demise of television," Ken Lowe, VP and co-founder of bargain TV maker Vizio declared at the SID conference in Seattle this morning.

Lowe said television is being replaced by the "entertainment display" -- devices that output high definition content, connect to the Internet and are increasingly built with LED lighting that uses about the same wattage as a light bulb.

Just don't use the potentially confusing acronym "ED" for these things, he said.

Lowe had other pronouncements. Although 3-D content is getting lots of hype, there still isn't much content so he's expecting it won't really take off until 2011.

In the meantime, the must-have feature on new TVs -- "like 1080p was" -- is now LED backlighting, which uses less power and enables thinner sets.

"2010 is the year of the LED backlight," he said.

About a fifth of Vizio's sets are now LED, but the mix should be 40 percent by year-end.

Helping make the transition are two new sets Lowe showed off -- throwing down two price gauntlets for the world's major TV makers represented at the show. They also illustrated the sort of "entertainment device" that's replacing the usual TV (ED TVs?).

One was the M220NV, a 22-inch LED set with 802.11n Wi-Fi, 1080p resolution and Vizio's suite of Internet applications, including Netflix, Flickr and social networking for $360. Lowe said it's intended to be placed in kitchen, bedroom or other room in the house where it will be simple to connect wirelessly and access online content.

Later this year, Vizio is releasing a 55-inch LED set with 3-D, full HD, 480Hz refresh rate and Internet apps for "over $2,000," he said. An image of it shown during his presentation:

Paul Gagnon, DisplaySearch TV research director, suggested earlier at the show that 2012 may be the year of LED -- or at least the year that the majority of sets sold worldwide are LED lit. A slide from his presentation:

We've been in discussions with Microsoft. We still continue to have a great relationship with those guys.

Ultimately for us the balance between being exclusive to either first party, whether it be Microsoft or Sony, to really engage with a globally engaged partner like Activision was a major component of not choosing Microsoft or Sony.

Will you move the studio to Santa Monica?

There is not a chance we'll move the studio to Santa Monica.

Will you share details of the new game before "Halo: Reach" goes on sale?

You should expect that were focused on Reach.

When will you release the new game?

It will be sometime. I know its going to knock everybody's socks off.

So, 2011 perhaps?

I wouldn't commit to a date.

Will your next franchise be bigger than "Halo"?

Absolutely.

Incrementally or exponentially?

Exponentially ... we've spent a lot of time laying out plans that took what we learned over the next 10 years.

Does Activision have exclusive rights to additional franchises developed by Bungie over the next decade?

This particular deal we're focusing on one franchise. There's potential for new franchises that we come up with for Activision.

Will this mean a big increase in employment at the studio?

We're going to continue to do what we've been doing since we left Microsoft (and work to) attract the best people in the industry. We're not currently planning to take on major acquisitions or anything that would drastically grow us.

Do you have enough resources to build multiple franchises at once now?

We have enough people to do two things at once but what we're planning for our next IP (intellectual property) is super aggressive and it's going to be the biggest thing ever.

Kirkland game studio Bungie, the creator of the hit "Halo" franchise for Microsoft, today announced a mondo publishing deal that will make Activision Blizzard the exclusive publisher of its next franchise for 10 years.

Bungie spent two years developing an entirely new game that will be released sometime after its "Halo" finale, "Halo: Reach" is released by Microsoft this fall.

A value wasn't placed on the deal, but the entertainment franchise at stake is likely to be worth more than $1 billion and consume millions of hours of people's time. Activision stock rose 3 percent, to close at $11.26 today.

Bungie's likely to release at least three titles in the new franchise, the first of which could go on sale in 2012, according to a research note by analyst Shawn Milne at Janney Montgomery Scott.

Microsoft -- and Sony -- were among the companies that made bids for Bungie's next title but the studio opted for a partner that would publish to all platforms, said Harold Ryan, Bungie president.

"We had agreed with Microsoft awhile ago to let them have first look at our game, so we did that," Ryan said. "But we retained the right to negotiate for the best deal for the studio."

Microsoft's games group issued a statement noting that it continues to have a relationship with Bungie as a developer for the Xbox 360.

"We're not at liberty to discuss details of Bungie's publishing agreements," the company said. "We respect Bungie's decision as an independent studio to develop games for multiple platforms."

Santa Monica, Calif.-based Activision is the top publisher of Xbox and PlayStation games in the U.S. and one of the top publishers worldwide. Its portfolio includes the biggest rival to "Halo," the "Call of Duty" franchise, but it's in a legal fight with studio Infinity Ward over "Call of Duty: Modern Warfare 2" bonus payments.

Bungie was started in Chicago in 1991 and moved to Kirkland after Microsoft bought the studio in 2000. They split in 2007, but Microsoft continued to publish the "Halo" franchise.

Now the 180-person studio has financial security and the backing of a top game company for the next decade. It also means the former Microsoft studio's future games will be available on platforms besides the Xbox.

Activision's getting "exclusive, worldwide rights to publish and distribute all future Bungie games based on the new intellectual property on multiple platforms and device. Bungie remains an independent company and will continue to own their intellectual property," the release said.

Additional financial details weren't disclosed.

The announcement noted that Bungie's "Halo" games have generated about $1.5 billion in sales, according to NPD, and been played online more than 2 billion hours.

Activision Chief Operating Officer Thomas Tippl said the deal with "one of the world's best developers" strengthens Activision's growth plans. It also solidifies the company's position as the leading publisher of interactive games played online.

Tippl noted that Activision's portfolio includes leading online games such as "World of Warcraft," "Call of Duty" and now the work of the "Halo" creators.

"Now we can bring all that expertise together and it makes a pretty compelling case we can achieve, as Harold likes to phrase it, world domination," he said.

Tippl said Bungie isn't filling a slot created by Activision's fallout with Infinity Ward.

"It's completely unrelated," he said. "We started the discussion with Bungie nine months ago. The timing is purely coincidental. In fact, we had already signed a term sheet with Bungie in March and we just completed our long form today."

Even though it didn't get the publishing contract, Sony will now get Bungie content onto the PlayStation. In case this wasn't clear, the company's computer entertainment group released a gleeful statement of congratulations:

"The partnership between Bungie and Activision is a big win for gamers worldwide. Combining Bungie's creativity with the incredible power of PlayStation 3 will add serious muscle to action gaming. We look forward to extending Bungie's 'next big action game universe' with PS3 users."

The biggest tech product coming out of the Seattle area this year, other than Microsoft's Office 2010 suite, may be "Halo: Reach."

Millions of gamers around the world are waiting for Kirkland studio Bungie to release the final installment of the blockbuster franchise that helped establish the Xbox platform.

To prime the pump and smooth any rough spots before "Reach" goes on sale this fall, Bungie and Microsoft are beginning a massive public testing process May 3.

At least 2 million people are expected to try the free online beta version of "Reach's" multiplayer games, using access codes provided with the "Halo 3: ODST" game, which went on sale last September.

The swarm will stress test the game's infrastructure and help designers tweak the setup so the game is as balanced and fun as possible.

Bungie is hoping it will be the largest beta test of any console game, according to Brian Jarrard, the 180-person studio's community director.

"We know that we have passionate fans who we are going to encourage to try to break the game and find these issues now so we don't have to deal with it in the fall,'' he said.

Jarrard and Chris Carney, a former Seattle architect who is now a multiplayer design lead at Bungie, shared details of the beta, the game and more last week. Here's an edited transcript of the interview:

For its noisy shootout with Microsoft this fall, Sony is turning to one of its big guns in Redmond.

Sony is counting on Zipper Interactive to produce a blockbuster game for the PlayStation 3 this fall, when it's releasing a new version of its hit "SOCOM" military-action franchise.

The game will help showcase a new PS3 motion-control system called Move that's expected to cost about $100.

Move is going head-to-head with Microsoft's Project Natal control system for the Xbox 360 in the crucial holiday season.

Both companies are hoping these exotic new control systems will refresh their maturing consoles as the economic recovery takes hold.

They're also hoping for the kind of success that Nintendo has enjoyed with the Wii, attracting players turned off by complicated control systems, while also inspiring game studios to create new forms of immersive entertainment.

Zipper and "SOCOM" helped Sony leap ahead in the past.

When the PlayStation 2 introduced a network adapter enabling online play in 2002, the first "SOCOM" game was released to showcase this capability. The "SOCOM" franchise went on to be one of the PS2's biggest hits, selling more than 10 million copies, and Sony bought Zipper in 2006.

"SOCOM 4" is still early in development, with no price or release date set yet, but Sony has been showing it to fans and reporters in events across the country, including one in Seattle earlier this month.

During that session, I caught up with Zipper President Brian Soderberg, who co-founded the studio in 1995 after working on military-simulation systems. Here is an edited excerpt of the interview:

Q: What was it like to make a game with Sony's Move motion-control system?

A: Well, it actually was quite easy. I was a little skeptical after playing the Wii because it's very casual game and "SOCOM 4" is more of a core game. Although really, we're shooting for a more accessible game. I think the Move does that for us â€" it's much easier than trying to get both thumbs going.

Q: I'm curious about how physical the game will be, like with physical attacks?

A: We're still researching additional gestures. I know we're going to do some close-quarters moves like rifle butts and maybe bayonet style. Other things you can investigate is grenade throw and things like that.

Q: I wonder how people will feel about intense games like this and motion controls. When you start killing characters with your motions instead of just your thumbs, is it going to be a different psychological experience?

A: I think it will. It's interesting, when you walk by our offices and you see people playing with it, they actually seem a little more immersed, because it is more like a gun.

I think it actually opens the door for more immersion and obviously when you start doing gestures you're getting more physical and more into the game.

Q: How far can you go this direction? Is there some kind of boundary you don't want to cross, having people do these things physically?

A: I don't know about boundaries. It feels like there are really no boundaries that you have now. You have full 3-D motion and such accuracy and precision; you can pretty much do anything. Anything you can do with two hands, you can start to make that the interface to your game.

Q: It's like we're at a crossroads with entertainment, with these new systems taking us into the next realm.

A: I think this really is. It's just what are the developers going to do to take us to that next level.

Q: How will Sony's motion system do compared with other motion systems coming out this year?

A: Sony took their time and they did some really neat things. Their thing was to be super comprehensive with the full 3-D space recognition, plus the full three axis recognition, plus the precision and very low latency. It makes it possible to play all these core games, besides casual games, with such precision. I think the core game players are maybe going to embrace this as well.

Q: Do you think Microsoft's Natal system is sharp enough for aiming and motion in core games, or do you think they might just have minigames that show off Natal capabilities?

A: The minigames, casual games, are the obvious things that would be easy to do with that system. I'm not sure how you start doing guns in it. Maybe they're going to have add-on controllers, additional peripherals, added into it.

Q: Is it hard to keep your team motivated to build the fourth edition of something?

A: I always think that. I always think they're going to get tired of it. But when I actually check around the team a lot of them are really rabid "SOCOM" fans too, so they get really excited about it.

Q: I hear this version's going to be more cinematic.

A: Definitely. Besides the usual emphasis on AI [artificial intelligence] and replayability and being able to do things from different directions, the single-player will have a very cinematic story. As you play through you'll actually learn things about what's going on with your enemies and your teammates. There will be some cool surprises, that sort of thing.

We did some really cool things with the cinematics. Rather than just doing motion capture where you hook up the guys and capture the motion, at the same time we also captured the voice so we did dialogue and motion together. ...

Q: So they basically acted it out?

A: They basically were actors, yeah. We capture everything. We even did some digitization of the camera moves as well, so we had a handheld camera and a professional cameraman to actually do the motion. It really makes a difference; it makes it really feel like a movie.

Q: I understand this material will appear not just in cinematic sequences but during game play as well?

A: Absolutely. As much as we can. First of all, it's going to run in the actual game engine, so it's not like movies [playing at certain points during the game]. As much as we can, we will not take the camera away from the player. You'll be going through the environment and you'll just experience these cinematic events. ...

Q: How is business? We heard dreary reports about the game industry over the past year and now all sorts of interesting new things are coming to market. Are we into a new cycle?

A: It seems like it's turned around to me. Sony's really bullish on the future and we have some really big titles ... just came out. There are some big titles coming out and I think Sony's really doing well so I think the business is turning around.

Q: Do you think people have money to buy these new games and motion systems?

A: I think so. These new games that have been coming out recently have some pretty big numbers with what they sold. I think things really are turning around.

Marking the end of "Halo 2" online play after Xbox Live pulled the plug this week, the Bungie team shared bittersweet, hilarious and sometimes raunchy stories behind the hit Xbox game on a special memorial page today.

In addition to glimpses of life inside the secretive Kirkland game studio, the page has anecdotes from the intense rush to finish the game, art proposals that weren't included and a spectacular batch of game storyboards. Here's a bit from a screen grab:

Most amazing, though, may be the final tally of "Halo 2" online activity over the last five years. A sample:

Unique Players (not including guests): 6,603,900
Kills: 36,784,837,266 (Or something like 5.5 times the current population of the earth)
Assists: 10,422,552,715

Seconds in Matchmatchmade games: 1,798,459,752,186
Minutes in Matchmatchmade games: 29,974,329,203
Hours in Matchmatchmade games: 499,572,153
Days in Matchmatchmade games: 20,815,506
Years in Matchmatchmade games: 56,991 (So since around 54,981 BC, about the time Europe was thought to have started being inhabited by Neanderthals)

Seconds playing campaign on live: 850,462,468,852
Minutes playing campaign on live: 14,174,374,480
Hours playing campaign on live: 236,239,574
Days playing campaign on live: 9,843,315
Years playing campaign on live: 26,950 (Or about 1.7 billion dollars at a minimum wage of 7.25)

Average salaries of video game developers fell with the industry's downturn last year, according to a new survey that estimates their average pay declined 4 percent in 2009 to $75,573.

That follows a record high of $79,000 that U.S. developers made on average in 2008.

The stats come from the ninth annual salary survey by Game Developer Research, which is affiliated with Game Developer magazine and Gamasutra.com. It's based on 4,050 responses and has a 3.1 percent margin of error.

For perspective, the Seattle area's game industry employs more than 15,000 people, according to a regional study done in 2007. It said wages are higher than average in the Seattle area and averaged $77,700 at the time.

Here are more 2009 salary averages from today's Game Developer release:

Programmers: $80,320 (although those with six years' experience made 36 percent more).

Artists and animators: $71,071, up 2 percent.

Game designers: $69,266, up 3 percent.

Writers: $61,786.

Game design, excluding leads and creative directors: $61,859.

Production: $75,082. (Survey also found 18 percent of workers in this category are women, double the industry average.)

Testers/QA: $37,905 (although average salary more than doubles for those with more than six years of experience).

Sony brought a group of developers and demo games to show the system to local fans and press. A highlight was demonstrations of "Socom 4," a Move version of the franchise developed by Zipper Interactive, a Sony-owned studio in Redmond. Socom 4 will launch around the same time as the Motion system in the fall.

Nintendo DS owners wanting a plug-in piano keyboard for their device can stop envying their European counterparts.

Redmond publisher Valcon Games is bringing the "Easy Piano" game and keyboard to the North American market starting this week. Franco-Belgian game company GameLife released the title in Europe last September .

The $39 bundle includes a 13-note, full-octave external keyboard that plugs into the DS and software for learning keyboard skills, playing rythym games and composing and recording songs up to three minutes long on the DS.

"Easy Piano" is scaled to fit the standard DS; it doesn't yet have a larger keyboard for the new DS XL. The game is starting to appear this week at major retailers.

The Big Fish Babes I profiled last summer are still together and were highlighted this morning on "The Today Show," which included video taken at Seattle's Big Fish Games, the company whose casual titles brought the group of women together.

One of the higher profile games out of the Seattle area next year may be "Lord of the Rings: War in the North," which Bothell's Snowblind Studios is making for the Xbox 360, PlayStation 3 and PC.

The 2011 release was announced today by Snowblind's parent company, Warner Brothers, and will be on the cover of PlayStation Magazine's May edition.

Warner is calling it a "mature," epic, multiplayer action-role playing game based on the novels by J.R.R. Tolkien.

"In 'The Lord of the Rings: War in the North,' Snowblind will deliver an action RPG for core gamers featuring authentic narrative and environmental locations from J.R.R. Tolkien's original 'The Lord of the Rings,' " Snowblind founder and studio head Ryan Geithman said in the release. "This game is a natural evolution of the acclaimed RPG gameplay that Snowblind has consistently delivered over the past years. Players and fans will experience an innovative approach to online co-op gameplay, woven throughout every facet of the game in a way that only Snowblind can deliver."

Redmond game company WildTangent is pushing its "BrandBoost" ad platform into social gaming starting with Facebook hit "Tiki Farm," where players will be able to get virtual items and premium content by watching ads instead of paying with credit cards.

WildTangent is announcing a partnership with Playdom, the Silicon Valley game company behind Tiki Farm, which has up to 7 million monthly players on Facebook.

"It's going to open up the social games arena to household brands, to big brands,'' said Dave Madden, WildTangent executive vice president.

Advertisers such as Kraft, General Mills and Microsoft have sponsored more than 100 million game play sessions using WildTangent's system over the past few years, helping the company grow sales more than 40 percent per year.

Madden said expanding the system to social games should help the company grow sales even more in 2010.

It might also make privately held WildTangent a more attractive acquisition target, if the numbers are as good as Madden expects.

"There's certainly a lot of interest," he said, "but we're loving our growth right now and the excitement [of other companies] partnering with us."

But there was a silver lining for Microsoft, whose Xbox 360 was the best selling console of the month for the first time since September 2007, when "Halo 3" was released. The company sold 422,000 consoles last month, compared with 360,100 PlayStation 3s sold by Sony and 397,900 Wiis sold by Nintendo. The handheld Nintendo DS sold 613,200 units.

I wonder if next week's arrival of Sony's "God of War III" will give PS3 the top spot in March.
"Bioshock 2" on the 360 was the top selling game, followed by "New Super Mario Bros. Wii" and "Modern Warfare 2" on the 360. NPD said "Modern Warfare 2" has become the third best-selling game ever, with just under 10 million units sold since its launch in November.

The word from San Francisco, where it was shown last night at the Game Developers Conference, is that it's fun to play.

But it sure looks familar -- just like Wii controllers, including a primary controller topped with a ball that reminds me of the Jack in the Box antenna globes. A secondary controller is pretty close to the Wii nunchuck, but with Bluetooth wireless instead of a cable.

Starter kits with a sensor and a game will cost less than $100.

Here's a Sony video with game demonstrations via Joystiq, which has a big roundup on the gadget.

It had to happen eventually: Mock guitars are giving way to real ones in a new "Guitar Hero" type game announced today by a game studio affiliated with instrument maker First Act.

A specially designed electric guitar for "Power Gig: Rise of the SixString" will take input along its neck. It will also be playable as a real instrument that can be connected to a standard guitar amp.

" 'Power Gig: Rise of the SixString' is meant to be the answer for all of those gamers who have wanted to take their band game experience to the next level; we're confident that players will agree that the transition from the existing games is both seamless and exhilarating," Seven45 Studios CEO Bernard Chiu said in the release.

The game is coming to the Xbox 360 and PlayStation 3 in the fall. A preview is being shown today at the Game Developers Conference in San Francisco.

Valve is also going to release future versions of its games on the Mac simultaneous with their release on the PC and Xbox platforms starting in the holiday season with "Portal 2," a sequel to the hit puzzle game initially developed at Redmond's DigiPen Institute of Technology.

"As we transition from entertainment as a product to entertainment as a service, customers and developers need open, high-quality Internet clients," Gabe Newell, Valve president, said in the release. "The Mac is a great platform for entertainment services."

Valve's Steam service will let players switch between Mac and PC versions at no extra charge.

John Cook, director of Steam development, explained further in the release:

"We looked at a variety of methods to get our games onto the Mac and in the end decided to go with native versions rather than emulation. The inclusion of WebKit into Steam, and of OpenGL into Source gives us a lot of flexibility in how we move these technologies forward. We are treating the Mac as a tier-1 platform so all of our future games will release simultaneously on Windows, Mac, and the Xbox 360. Updates for the Mac will be available simultaneously with the Windows updates. Furthermore, Mac and Windows players will be part of the same multiplayer universe, sharing servers, lobbies, and so forth. We fully support a heterogeneous mix of servers and clients. The first Mac Steam client will be the new generation currently in beta testing on Windows."

Gadgets and games | Fun stuff I've written about lately includes Apple's iPhone, Hewlett-Packard's HDX laptop and Microsoft's Halo3. Also on the radar are new digital video boxes such as the Tivo HD and the Vudu.